SRISH CHANDRA SEN (DECEASED) AND OTHERS versus THE COMMISSIONER OF INCOME-TAX, WEST BENGAL

Citation: [1961] 2 S.C.R. 598 · Decided: 23-11-1960 · Supreme Court of India · Bench: S.K. DAS · Disposal: Dismissed

Judgment (excerpt)

Noveinber 23. 
598 
SUPREME COURT REPORTS 
SRISH CHANDRA SEN (DECEASED) 
AND OTHERS 
v. 
[1961) 
THE COMMISSIONER OF INCOME-TAX, 
WEST BENGAL 
(S. K. DAS, l\L HrnAYATULLAH and J.C. SHAH, JJ.) 
Income Tax-Agriwlt11ral income-Acquisition of land form-
ing part of permanently settled estate-Redemption of liability to 
pay land revenue by payment of lump sum--Agricultural income 
from the land-Liability to income-tax-Indian Income-tax Act, 
z922 (II of z922), s. 2(1). 
By a notification dated November 2, 1864, a piece of land 
forming part of the Panchannagram Estate which was permanent-
ly settled under Regulation I of 1793. was acquired by the 
Government of Bengal at the instance of the Justices of the 
Peace for the Town of Calcutta, which was a corporation establi-
shed under the provisions of the Calcutta Municipal Act, 1863, 
and the Justices were required to pay the compensation payable 
to the proprietor of the Estate. After the acquisition, the pro-
prietor of the Estate was granted abatement of land revenue 
assessed on the Estate to the extent of Rs. 386-7-1, being the 
proportionate land revenue on the land acquired. On October 
27, 1865, the Government called upon the Justices to pay a sum 
of Rs. 7,728-13-8, which represented the amount capitalised at 
20 years' purchase of land revenue attributed to the area acquir-
ed. On December 5, r870, the Secretary of State executed in 
favour of the Justices of the Peace a conveyance of the land 
acquired, \vhich stated, inter alia, that it was "ever free and 
clear and for ever discharged from all Government land revenue 
whatever or any payment or charge in the nature thereof to the 
end and intent that the said land may be used for a public pur-
pose, namely, for the conservancy of the town/' On January 
23, 1880, a lease of the land was granted by the Justices to the 
predecessors-in-title of the appellant, under which the lessee had 
the right to carry on cultivation with the aid of sewage. 
Before the income-tax authorities the appellant claimed 
that the agricultural income derived by him from the land was 
not liable to income-tax, but the claim was rejected on the 
ground that on the payment of a lump-sum in 18b5 the liability 
to pay land revenue was redeemed and no land revenue was 
demanded thereafter; consequently, the income derived from the 
land was not agricultural income within the meaning of s. 2(1) 
of the Indian Income-tax Act, i922, and was not, therefore, 
exempt from tax. The appellant's contention was that the 
redemption only saved the Justices from liability for payment 
but did not affect the assessability of the land to revenue 
under Regulation I of 1793· 
.. 
. ···'- -·-· .. 
2 S.C.R. SUPREl\IE COURT REPORTS·· 
599 . 
Held, that by the down payment cif a lump suni in 1865 the 
z960 
entire land revenue to be recovered from the land was redeemed 
and the land became free from land revenue assessinent in per- Srish Chandra Sen 
petuity, as completely as if there was no assessment. There-
v. 
after, the land could not be said to be assessed to land revenue 
Commr. of 
within the meaning of s. 2(1) of the Indian Income-tax Act, 
Incom• Tax 
1922, and, consequently, the income derived therefrom could not 
be considered .to be agricultural income under that section. 
The Collector of Bombay v. Nusserwanji Rattanji Mistri ~nd 
Others, [1955] l S.C.R. 1311, distinguished. 
CIVIL Al'l'ELLATE JURISDICTION: Civil Appeal No. 
405of1957. 
Appeal from the judgment and order dated l\Iay 
15, 1956, of the Calcutta High Court in I.T.R. No. 20 
of 1953. 
S •. 11! itra, B. Das and S. N. Jr! ukherjee, for appt'.!: 
lants Nos. 2 to 41. 
A. N. Kripal and D. Gupta, for the respondent. 
1960. Nov_ember 23. The Judgment of the Court 
was delivered by 
· 
I 
HrnAYATULLAH, J.-The point involved in this Hidayatullah ]. 
appeal is a very short one; but it requires a long nar-
ration of facts to reach it. The appeal is against the 
judgment and order of the High Court of Calcutta 
dated l\Iay 15, 1956, arising out of an Income-tax 
Reference. 
By the Calcutta l\Iunicipal Act VI of 1863, there 
was established a Corporation under the name of 
"The Justices of the Peace forthe Town of Calcutta". 
By a notification issued on November 2, 1864, one 
square mile of land forming part of the Panchan-
nagram Estate was· acquired by the Government of 
Bengal at the instance of the Justices. · Section CXII 
of the ~Iunicipal Act provided that the Justices might 
"agree with 

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