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TMI Blog1976 (1) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... 0th June. The assessee is a co-operative sugar factory carrying on the business of manufacture of sugar for which purpose it purchases sugarcane from growers. The assessee acquired through the State Government 147 acres 30 guntas of land in Sankeshwar in Belgaum District, pursuant to the Government notification dated May 25, 1959. The land was acquired for the purpose of sites for Hiranyakeshi Sahakari Sakkare Karkhane Niyamit. The assessee obtained an order from the Deputy Commissioner allowing conversion of the said land for non-agricultural purposes. The relevant order of the Deputy Commissioner, Belgaum, is dated December 30, 1961. The said order, inter alia, provided that the assessee shall pay normal non-agricultural assessment at Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t obtained an order allowing conversion of its land, raised sugarcane crop during the accounting years relevant to the five assessment years. The Agricultural Income-tax Officer levied tax under the Act on the income of the assessee for the five assessment years. The said assessments were challenged on several grounds, inter alia, that the land having been allowed to be converted for non-agricultural purposes, no tax could be levied under the Act. That contention was rejected by the Income-tax Appellate Tribunal, holding that the land in question was used for agricultural purposes, viz., growing sugarcane during the relevant accounting years and, further, that the land was not exempted from land revenue. The Tribunal made a common order for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome " has been defined to mean " any rent or revenue derived from land which is used for agricultural purposes and is either assessed to land revenue in India or is subject to a local rate assessed and collected by officers of the Government as such ". By virtue of the definition of the term " agricultural income " incorporated in article 366 of the Constitution, the definition of that term in the Indian Income-tax Act is deemed to be a part of the definition given in the Constitution and it is not open to the State legislature to extend the meaning that is given to the term in the Indian Income-tax Act. In view of the definition of the term "agricultural income" as given in the Indian Income-tax Act, 1961, in order to come within the scope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilding, and (c) for a purpose other than agriculture or building. (2) (Not necessary)." In the Karnataka Land Revenue Act, there is a provision in section 95(7) empowering the Deputy Commissioner to levy a fine, popularly called as "conversion fine" and if such fine is paid no assessment shall be levied on such land thereafter except under sub-section (2) of section 83. The assessee has not produced any order levying such fine which exonerates the land from any future liability to pay assessment. In Srish Chandra Sen v. Commissioner of Income-tax [1961] 41 ITR 340 (SC) it has been laid down that in order to free the land from liability to land revenue, it must be shown that the land was revenue-free in fact and in law. If it is shown ..... X X X X Extracts X X X X X X X X Extracts X X X X
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