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Issues Involved:
1. Nature of compensation received by the assessee. 2. Whether the compensation received constituted agricultural income exempt from tax. 3. Proper disposal of specific grounds of appeal by the Tribunal. 4. Applicability of rules 23 and 24 of the Income Tax Rules. Detailed Analysis: 1. Nature of Compensation Received by the Assessee: The primary issue was whether the sums of Rs. 2,12,080 and Rs. 2,31,563 received by the assessee in 1945 and 1946 respectively (excluding sums for building repairs) were revenue receipts comprising any element of income. The court noted that the compensation received was for the use of requisitioned property, which included factory buildings and other structures but not the tea garden itself. The compensation was calculated based on the potential income from tea manufacturing had there been no requisition, minus the expenses saved due to the suspension of operations. The court concluded that the compensation received was indeed revenue in nature and constituted income as it was derived from the use of the property, even if the business operations were suspended. The court referenced the principle that income is not necessarily a recurrent return from a definite source but can consist of a series of separate receipts. 2. Whether the Compensation Received Constituted Agricultural Income Exempt from Tax: The second issue was whether the compensation, after deducting expenses for tending the tea bushes, constituted agricultural income exempt from tax. The court emphasized that for income to be classified as agricultural, it must be derived from land used for agricultural purposes. In this case, the requisitioned property was used for non-agricultural purposes by the military, and no agricultural operations were carried out during the period of occupation. The court referred to previous decisions which established that the actual use of land for agricultural purposes is essential for income to be considered agricultural. Consequently, the court held that the compensation received did not constitute agricultural income and was therefore taxable. 3. Proper Disposal of Specific Grounds of Appeal by the Tribunal: The assessee contended that the Tribunal did not address specific grounds of appeal related to deductible expenses and the estimate of profits from the hessian bags account. The court examined affidavits and found that the affidavit from the assessee's employee was based on hearsay and not from personal knowledge. The court presumed that if points raised in the grounds of appeal were not addressed in the judgment, they were not pressed during the hearing. The court held that the omission to address these points implied their rejection and did not warrant a writ of mandamus for reopening the case. 4. Applicability of Rules 23 and 24 of the Income Tax Rules: The court noted that the third member of the Tribunal expressed doubts about the applicability of rules 23 and 24 of the Income Tax Rules. These rules pertain to the computation of income from tea grown and manufactured by the seller. However, the court found that the compensation received did not fall under these rules as the land was not used for agricultural purposes during the military occupation. The court emphasized that the compensation was for the use of the property and not for any agricultural operations. Conclusion: The court answered the first question affirmatively, holding that the compensation received was revenue in nature and taxable. The second question was answered in the negative, concluding that the compensation did not constitute agricultural income. The court dismissed the petitions under section 66(2) of the Income Tax Act and article 226 of the Constitution, finding no grounds for interference with the Tribunal's decision. The court also highlighted the importance of the Tribunal addressing all points raised in the grounds of appeal to avoid omissions and ensure comprehensive judgments.
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