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TMI Blog1942 (3) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax on a sum of ₹ 4,034 which represented interest on arrears due from various mustajars. The assessee claimed that this interest formed part of his agricultural income and was not assessable to Income Tax. The taxing authorities, however, came to e conclusion that this interest on arrears was in no sense rent and could not be regarded as agricultural income. The Income Tax Officer, therefore, assessed this sum to tax, and his decision was affirmed by the Assistant Commissioner. The Commissioner in review proceedings took the same view and declined to refer the question to this Court under Section 66(2), Indian Income Tax Act. Application, however, was made to this Court, and this Commissioner was directed under Section 66(2), I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduce rents from the tenants. The view I take of this lease is fully supported by the definitions given in Wilsons Glossary of the term Mustajir and Mustajiri . Mustjir is defined as a farmer, a renter, one who holds lands under a proprietor at a stipulated rates; also a farmer of revenue appointed to make the collections on the pare of a Zamindar or proprietor, on condition of paying a fixed sum. Mustajiri is defined as renting, farming, holding in farm, settlement in farm. A Mastajiri lease is, in my view, a lease which creates an interest in land. The proprietor give up his right to collect the rents from the tenants and grants the same to the mustajir in return for a fixed payment. That fixed payments is, in my view, the wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. He railed upon a recent Calcutta case, Sheikh Eusuf v Jitendra Nath Roy (1924) 38 CWN 184 in which it was held that interest payable on rent either under a contract or under the law is not rent as defined in the Bengal Tenancy Act and a separate suit for interest only is not maintainable as a rent suit under the Bengal Tenancy Act. The Beach which decided that case appears to have been of opinion that a difference existed between cases in which interest in claimed with rent and cases where interest on rent alone is Tenancy Act, but it was not maintainable if interest alone was sued for. the rent, then he suit was maintainable as a rent suit under the Bengal Tenancy Act, but it was not maintainable if interest alone was used for. Eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st on mustajiri rent should be regarded differently from interest on rent payable by a raiyat. If the latter interest has always been regard as part of a Zamindars agricultural income it appears to me that interest payable on arrears of mustajiri rent must also be so regarded. Once it is held that the annual payment fixed by the mustajiri lease is rent, then the same rules must govern interest running on arrears of such rent as apply to interest on arrears of rent paid by a cultivating tenants direct to the landlord. No distinction can be drawn between the two and that being so, I would hold that interest on arrears of mustajiri rent forms part of the Zamidars agricultural income an is therefore not taxable. For these reason I would an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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