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Issues:
1. Whether the sum paid as salami is in the nature of compensation and not assessable to income-tax. 2. Whether the sum paid as rent constitutes agricultural income and is exempt from tax. Analysis: 1. The case involved a reference by the Income-tax Tribunal regarding the assessability of a sum paid as salami and rent. The salami of &8377; 50,000 was paid for leasing out lands to accommodate refugees during the war. The Manager, Court of Wards, argued that the salami was compensation or capital receipt and exempt from tax. However, the Income-tax Officer assessed it as income. The High Court analyzed the nature of the transaction and concluded that since it was a contractual lease without any compulsory acquisition or loss to the land, the salami should be treated as income, not compensation. 2. Regarding the sum paid as rent, the parties admitted that the land was not used for agricultural purposes during the accounting period. The court referred to precedents emphasizing the actual use of the land as the decisive factor for determining agricultural income. As the land was not used for agriculture, the court held that the sum paid as rent did not qualify as agricultural income and was assessable for tax purposes. The court answered the questions in the negative, indicating that both the salami and rent were to be treated as assessable income. In conclusion, the High Court of Dacca ruled that the sum paid as salami for leasing lands to accommodate refugees during the war should be treated as income, not compensation. Additionally, the court held that the sum paid as rent, despite being argued as agricultural income, was not exempt from taxation as the land was not used for agricultural purposes during the relevant period. Both sums were deemed assessable for income tax purposes based on the court's analysis of the facts and legal principles.
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