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TMI Blog1971 (1) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... f some villages within the municipal limits of Faizabad and Gonda. During the years 1360, 1361 and 1363 Fasli, the petitioner realised arrears of rent in respect of that part of the estate which had ceased to belong to him. The arrears represented rent accruing in 1359 Fasli and earlier years. In proceedings under the U. P. Agricultural Income-tax Act, 1948, the petitioner was assessed for the assessment years 1361, 1362 and 1364 Fasli in respect of the arrears of rent received during the relevant previous years 1360, 1361 and 1363 Fasli. The petitioner appealed, and the Commissioner allowed the appeals and directed the assessing authority to make fresh assessments. During the pendency of the assessment proceedings consequent upon remand, the petitioner raised an objection before the assessing authority to the assessment of the arrears of rent, contending that as he had been divested of the property yielding that income with effect from July 1, 1952, he did not own or hold that property in the relevant previous years and assessment years, and was, therefore, not a " person " within the meaning of the Act. That objection has been rejected by the assessing authority. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual or association of individuals, owning or holding property for himself or for any other, or partly for his own benefit and partly for that of another either as owner, trustee, receiver, manager, administrator or executor or in any capacity recognized by law, and includes an undivided Hindu family, firm or company but does not include a local authority. " The person by whom agricultural income-tax is payable is, by virtue of section 2(5), referred to as the " assessee ". It cannot be disputed, we think, that the agricultural income charged to tax under section 3 must arise from property owned or held by the assessee. There may be a number of distinct properties giving rise to separate amounts of agricultural income. And it may be that before the relevant previous year the assessee ceases to own or hold one of the properties giving rise to one of the amounts of agricultural income received during that previous year. The dispute before us is whether, for the purposes of section 3, the agricultural income from such property can be charged to tax in the hands of the assessee, who, though ceasing to own or hold such property before the relevant previous year, nevertheless conti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must nevertheless be considered a " person " as defined by section 2(11) of the Act provided he owned or held other agricultural land. The learned judges repelled the contention that the capacity of the assessee as a " person " should be considered for the purposes of the Act with reference to the property from which the agricultural income sought to be taxed was derived and not with reference to all the properties owned or held by him. They observed that when considering whether the assessee was a " person " for the purposes of the Act, it was not at all necessary that the capacity of the assessee as a person must be established with reference to each item of agricultural income sought to be taxed. This decision was considered in Maharani Rajalakshmi Devi v. State of U. P. as settling the law on the point. In Raja Jagdish Pratap Sahi v. Deputy Commissioner a learned single judge of this court took the view that inasmuch as the Act required the " owning or holding " of property an essential condition of an individual being a " person ", it was necessary that he should own or hold during the assessment year the agricultural land from which the income sought to be assessed had pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant previous year or the assessment year. All that is contemplated is that there should be rent or revenue derived from land described in clause (a) or income derived from land by any of the operations mentioned in clause (b) or income derived from a building of the description set out in clause (c). So far as the computation of agricultural income is concerned, what one must do is to consider the receipts of the previous year which fall within one or more of the clauses of section 2(1) and thus determine the agricultural income of the previous year. It does not seem necessary to consider further whether the income proceeds from land owned or held by a person during the previous year or the assessment year. It is when we turn to determining who is the " person " to be taxed, that the owning or holding of land becomes relevant. As we have already pointed out, the definition in section 2(11) requires that he must own or hold property. If during the assessment year he owns or holds property, he is a " person " for that assessment year. If he owns or holds some property, that is sufficient to constitute him a " person " for that assessment year. It is not necessary that the property ..... X X X X Extracts X X X X X X X X Extracts X X X X
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