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TMI Blog1953 (2) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... ealised the above sum of ₹ 20,768/- as salami by settling tenants in respect of certain Nijchas, Nijjote, Anabadi and Nilam-Kharid lands of the Rutton Estate, Tuisipur, Cuttack. The petitioner's case is that settlements are oral and the tenants have obtained occupancy right by virtue of the settlements. The rents have been fixed by an enquiry in accordance with the rents paid in respect of similar lands in the vicinity. Indeed, the rent is not the village rent. The salamis are fixed by auction. In the statements submitted to us, we get it, there is no evidence that the present rent of settlement should be higher than the rent of similar lands in the neighbourhood. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case -- 'Commr. of Income-tax. Bengal v. Shaw Wallace Co.', AIR 1932 P. C. 138 (A). His definition was : Income, their Lordships think, in this Act connotes a periodical monetary return 'coming in' with some sort of regularity, or expected regularity, from definite sources. The source is not necessary one which is expected to bs continuously productive, but it must be one whose object is the production of a definite return excluding anything in the nature of a mere windfall. Thus income has bepn likened pictorialiy to the fruit of a tree, or the crop of a field. It is essentially the produce of something which is often loosely spoken of as 'capital'. But capital, though possibly the source in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lami could not be regarded as a payment of rent in advance, it could not be regarded as income and would, therefore not be taxable. Prima facie, salami is not income and it is for the Income-tax authorities to show that there do exist facts which would make the salami income. We would only quote the precedent in the case -- 'Province of Bihar v. Pratap Udai Nath Sahi Deo', AIR 1941 Pat 289 (3. B.) (D), which is a case under the Bihar Agricultural Income-tax Act. Harries C. J. after a review of all the decisions laid down the position of law as indicated above. It, therefore, appears to be settled law that it cannot be laid down as a hard and fast rule that salami can in no case be taxable. The question in each case would depend u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assistant Collector of Agricultural Income-tax inferred from this fact that as the salami is low it must be presumed that it represented a part of the annual rent commuted into cash payment. In his view, therefore, it constitutes agricultural income and is liable to be taxed. The Board of Revenue came to a contrary conclusion, on the facts, and held that as the lands were at the absolute disposal of the landlord and the occupancy right in them was transferred to the bidders at the auction the money realised at the auction was in the nature of a capital receipt and not income from, land. The Board also held that the rent fixed for the land was prima facie a fair rent and that it could not be legitimately inferred whether any part of the rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine the word 'salami'. The Assessing Officer referred to the notes for guidance in filling up the form, of return prescribed under the Act which lays down that salami paid or premium received by landlords for settling lands or wastelands or abandoned holdings for agricultural purposes, end salami or premium or fee paid to a landlord for recognition of transfer of a holding from one tenant to another are in the nature of income derived from land. The latter part of the direction refers to what is called mutation fee; and whether it is in the nature of agricultural income or not does not fall for decision in this case. The first part of the direction, namely, salami received by a landlord for settling lands or wastelands or abandoned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred. Their Lordships held: This annual payment is not agricultural income as it was not rent or revenue derived from land. It was money payable under a contract imposing a personal liability on the covenantor the discharge of which is secured by a charge on the land . The point again came up for decision before their Lordships of the Privy Council in -- 'AIR 1943 P. C. 153 (C)'. That was a case of a mining lease and the point for decision was whether the salami which was exigible by the lessor under the lease was income liable to be taxed. In their Lordships' opinion the salami 'had been rightly treated as a capital receipt' The reason given by the Board was that it is a single payment made for the acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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