THE MEMBER FOR THE BOARD OF AGRICULTURAL INCOME-TAX, ASSAM versus SMT. SINDHURANI CHAUDHURANI

1957

The Cammissioner qf Excess Profits Tax, West Bengal v T lit Ruby General J,.,uronce Co. Ltd.

V enkalarama Aryar ].

1957

April 24

S.C.R.

SUPREME COURT REPORTS

1019

We are of opinion that the principles bid down in Northern Aluminium Co., Ltd. v. Inland Revenue Commissioners( 1 ) and fo!cmd Revenue Commissioners v. ··N orthem Aluminium Co., Ltd.( 2 ) are applicable to the that a contingent decision of liability in respect of unexpired risk is not an "accruing liability" within r. 2 of Sch. II to the Act.

the present case, and

The decision appealed

from

is correct, and

this

appeal must accordingly be dismissed with costs.

Appeal dismissed.

THE MEMBER FOR THE BOARD OF AGRICULTURAL INCOME-TAX, ASSAM v.

SMT. SINDHURANI CHAUDHURANI

(with connected appeals)

(BHAGWATI, VENKATARAMA AYYAR and J. L. KAPUR J. L. KAPUR J J.)

Salami-lndicia--lf capital income-tax-Assam Agricultural 1939), s. 2(a) (i).

rrceipt-Liability Income-tax Act (Assam

to agricultural IX of

The

true

indicia of

character and (2) payment prior to It is po'session and can be neither rent nor re\'enue but receipt in the hands of the landlord.

salami are ( 1) its single. nonrecurring tenancy. the cre.'.ltion of the let into tenant for being is a capital

consideration paid by

the

the

Kamakshya Narain Singh v. The Commissioner of Income Tax

(l<J43) L.R. 70 I.A. 180, relied on.

Case-law reviewed. Rire11dra Kisliore ManikYa v. Secretary of State

India, (1920) l.L.R. 48 Cal. 766, Meher Bono Khanum v. Secretary of State for India, (1925) 1.L.R. 53 CaL 34, Raja Rajendra Narayan Bhanja Deo v. Commissioner af Income Tax, (1929) l.L.R. 9 Pat. 1 and Commissioner of Income Tax v. K. C. Manavikraman Rajah, I.LR. 1945 Mad. 837, distin~ished.

for

Consequently, where payments described· as

salamis and recci\'ed by cert3in zamindar assessecs as consideration for grant ing agricultural leases, by no means of a precarious nature, were

(1) (1946] I All E.R. 546.

(2) [19471 1 All E.R. 608.

1957

Thi Memh1r for th.I Board of

~griculturol In.come TIU, .Assam v. Smt. Sindhurani Chaudhurani

1020

SUPREME COURT REPORTS

[1957]

all made prior to such grants and were of a non-recurring character, but calculated at rates varying with the nature of the lands and chargeable on every subsequent eviction and re-letting, they were properly so described and were neither rent nor revenue within in s. 2(a) (I) of the Assam Agricultural Income-Tax Act and could not be assessed to tax under the Act.

'agricultural

definition

contained

income'

the

of

CIVIL

APPELLATE

JuRISDICTION : Civil Appeals

Nos. 162 of 1955, 38, 39, 40, 41, 42, 43 and 44 of 1956.

Appeal from the judgment and order dated January in 5, 1953, of the Calcutta High Court (Original Side) Income Tax Reference Appeal No. 12 of 1942 and July 2, appeals from 1952, of the Assam High Court at Gauhati in Agri cultural Income Tax References Nos. 1, 2, 3, 7, 9, 6 and 8 of 1949 respec_tively.

the judgment and order dated

Veda Vyasa and Nau nit Lal, for the appellants in C. A. No. 162 of 1955 and respondents in C. As. Nos. 38 to 44 of 1956.

R. Bak;i, S. N. Mukerjee and R. R. Biswas, for the respondents in C. A. No. lq2 of 1955 and appellants in C. As. Nos. 38 to 41, 43 and 44 cf 1956.

Appellant in C. A. No. 42 of 1956 not represented. the Court was 1957. April 24. The Judgment of

delivered by

these appeals

KAPVR · J.-In all

is the character and purport of 'Salami' and whether

for decision the payment the termed meaning of "agricultural the Assam Agricultural Income Tax Act (Ass. IX of 1939) hereinafter called the "Act".

it income" as defined

falls within in

the question

C. A. No. 162 of 1955 is directed against the

judg ment of the Calcutta High Court dated January 15, 1953. C. A. Nos. 38 to 44 of 1956 have been brought judgment of Assam High Court dated against together April 2, 1952. These matters were all heard in the Assam High Court and were disposed of by one judgment.

the

C. A. No. 162 of 1955 relates to the assessment year 1941-42. The assessee in that case was a -/8/9 annas

1957

TltliMembtr fo(tltl BMrd of Agriadtu ral lr1&ome Tax, AJSam v. Smt. Sindhura.i C/;audhurani

Kapur}.

S.C.R.

SUPREME COURT REPORTS

1021

co-sharer in a zamindari estate known as "Parbatjoar estate" in Assam. The original assessee was Jyotindra Narayan Chowdhury who died on January 25, 1953, and on his death his widow, Shrimati Sindhurani Chowdhurani and others were substituted. The gross agricultural income of the assessee was Rs. 89,633 and income from salami was Rs. 9.331-9-4 which was received from settlement of 414 different holdings out of which 278 were holdings of virgin lands and 136 those of what are described as auction-purchase were from salami 15 per lands. Out of the gross income cent. has been allowed as collection charges and the amount in dispute in this appeal therefore is Rs. 7,934. The Agricultural Income Tax Officer held this sum to be "ag~icultural income" by his order dated Novem ber 10, 1941, which was affirmed on appeal to the Income Tax. A:sist:mt Commissioner of Agricultural The revision taken to the Commissioner under s. 27 of the Act was dismissed but at the instance of the asses sec the following two questions were referred for the opinion of the High Court.

..

the the

( 1) Whether to

single non-recurring premia or salamis paid landlord assessee once only as consideration for the settlement of agricultural land at the time of granting a lease can be held to be income within the meaning of the Act)

to the

landlord assessee as consideration for

(2) Whether single non-recurring premia· or salamis paiLl the settlement of agricultural land once only at the time of granting lease when such premia or salamis are not the rate of rent charged, can be held to dependent on be income within the meaning of the Act?

these receipts

The Calcutta High Court by

judgment dated its to be "agricultural April 12, 1945, held income." Against this judgment an appeal was taken to the Privy Council but on the abolition of the juris diction of the Privy Council the appeal was transferred to the Federal Court and was heard by that court as C. A. No. 30 of 1949. That court set aside the judg ment of the High Court and remitted the case to the High Court "to be dealt with again after ascertaining and considering the following additional factors likely

1022

SUPREME COURT REPORTS

[19571

1957

to show the true nature of salami in the present case.

the receipts described as

The ll!imber for tM Board /)f Agricultural Income Tax, AsJam v Smt. Sindhurani Chaudhurani

Kapu' ].

"l. The number of settlement of waste lands and abandoned holdings during the . accounting year and the maximum and the minimum extel)ts settled and salami received. 2. Does the land, fa vourabie factors? 3. How many

the quality of the irrigation and such other

the salami vary with for facilities

tenants ejected under section 69 they had ;ind how long

during the accounting year been in occupation before such eviction?

4. Is salami received when

lands are relet after

eviction?

in

the nature of a

5. Is salami that is paid in the zamindary of the the assessee tenant to the landlord for the permission to occupy the land or whether it is in substance a premium payable by lessee at the inception of the tenancv ?"

'present' given by

After

the remand

the case was again stated by the Member of Assam Board of Agricultural Income Tax, Dr. Goswami, and answers these questions were:

to

1. Total number of settlements were 414, maxi mum extent being 59 bighas 2 Cottahs and 10 Dhurs, and salami Rs. 161-8-0! and minimum extent was 15 Cottahs and salami received therefrom Rs. 2-11-9. 2. Rate of salami varies with the quality of the lands, two fixed rates being Rs. 7 per bigha for jungle lands and Rs. 10 per bigha for non-jungle lands.

3. There was no eviction of tenants under section the Goalpara Tenancy Act. but action was 69 of taken in a large number of cases under section 68 of that Act.

4. Salami is realized when

lands are

relet after

eviction.

5. Salami is not in the nature of a present. It is a compulsory payment by the tenant to the landlord at the inception of the tenancy. In the Statement of the Case the Board said that the zamindar's business or vocation was letting out holdings

1957

Tht mtmber for the Boart! of Agricullural Incomt Tax, Assam v Smt. Sindhurani Chaut!hurani

Kapur].

S.C.R.

SUPREME COURT REPORTS

1023

against payment. The area of land held by him was a large one "which he lets out piecemeal to various tenants on conditions among others that the would-be teµant will first pay a fee which he prefers to call and that he will pay an annual rent." It held 'salami' t!ie this payment was not "a windfall", that that "'salami' arose from the landlord's business of letting out his lands, and .......... is an income'', that because the of receipt of salami, "it satisfies test of 'income' " received as salami were and "agricultural income" within s. 2 (a) ( 1) of the Act.

the "regularity or periodicity" attached

the amounts

therefore

the

to

On a consideration of the facts found by the Board in this case and after reference to the reported judg ments of the various courts, the Calcutta High Court held the .assessee as salami were not "agricultural income" and the Board has brought this appeal (C. A. No. 162 of 1955) against that judgment.

that the amounts

received by

In the Assam Appeals also the areas of land held by the assessees were large and total income in the case of "Parbatjoar estate" was Rs. 1,15,510 and in the case of Mechpara estate it was Rs. 2,82,106 which was the various co-sharers. Salami rates divisible amongst for in Parbatjoar estate varied from Rs. 7 per bigha forest land to Rs. 10 per bigha for other lands depend ing upon the quality of the land. In Mechpara estate the rates in hilly tracts were Re. 1 to Rs. 2 for good sali land and Re. 1 to Rs. 6 for other class of land and in the plains they varied from Rs. 2 to Rs. 3 for good sali land, and Re. 1 to Rs. 6 for other lands and As. 8 to Re. 1 for newly formed Char lands. In Bijni Raj the minimum salami was Rs. 1 per bigha estate irrespective of the area of the land. In Gauripur estate the holdings were settled by auction and the amount of salami was determined by the demand, depending irrigation. upon the quality of land and facilities for in the Chapter Trust estate holdings were Similarly settled by auction. The finding of the High Court was:

"It is . abundantly clear from the above statement of facts that the rates of salami vary with the quality

1957

Till Mtmb,, for 1111 B°"'"of Agrialll....Z Inconw Tu, As.ram v. Sm/. Sindlitrani Chowlhurani

KaJJl'T j.

1024

SUPREME COURT REPORTS

[1957}

of la!ld in each estate. They have no relation to rent which is admittedly fixed and invariable.

Lands are settled generally

in small plots; The highest figure received as salami in a single transaction in the years with which we are concerned was in Parbatjoar. A sum of Rs. 621 was received on a settlement of an area measuring 88 B., 14 K., 15 D. .In Mechpara an area measuring 165 B., 16 K., 12 D., was settled for Rs. 318. The minimum extent of area settled in one transaction was also in Mechpara. Lands measuring only 2 K. was settled. Salami received was two extremes the extent of Rs. 3-5-0. Between these areas settled varies."

There were no evictions under s. 69 of the Assam Tenancy Act of non-occupancy tenants but ejectments did take place and action was taken under s. 68 of the Act. After the re-statement of the case on the lines suggested by the Federal Court, the Assam High Court held is not rent but revenue derived from land and is therefore income ........ "

that "salami"

The questio)l for decision is whether

received as salami are definition liable to agricultural income-tax.

"agricultural

of

rent or

revenue within and

the amounts the therefore

income"

The basis of the first Calcutta Judgment dated May 12, 1945, in C.A. No. 162 of 1955 was that salamis were a normal and regular feature of these estates and there was periodicity. When the matter came up in appeal to the Federal Court the learned Chief Justice was of the opinion that the receipt termed salami if nothing more is stated in respect of it cannot be treated as a capital receipt and therefore exempt from taxation nor could it merely as such be treated as income and there fore assessable to income-tax. Mahajan J. (as he then was) said : "It may be a recurring or a periodical payment is a fee or a fine levied annually on the holder of rent-free tenures as a quit rent; on the other hand, it may not be a periodical payment or a recurring payment if it is in the form of gratuity or offering on revenue or on receiving a lease or settling for the receiving any favour real or implied." He was of opinion that in the former case it would be agricultural

the

it

if

1957

T lie Memh1r for 1/16 Board of Agricu /lural Income Tax, Auam v. Sml. SitulhuraniJ Chau<fh,,rani

Kapur].

S.C.R.

SUPREME COURT REPORTS

1025

income but in the receipt being the price for ownership which the landlord transfers to the tenant."

it would be a capital that small "modicum of

latter case

In the Assam cases Ram Labhaya J. said that by settling the lands and accepting salami the landlord parts with the right of immediate occupation.

to

the

tenant.

the cases" are

the "statements of

is a payment by a tenant

the It is really a payment by

The characteristics and incidence of salami disclosed from that it is a lump sum non-recurring receipt of money by a landlord from a tenant before making a settlement of the holding, which· in C'.A. No. 162 of 1955 varied from Rs. 7 to Rs. 10 per bigha and was less in other cases. He is also entitled to charge a fixed periodical amount of 11 annas per bigha per annum. Salami is charged when ever a fresh settlement is made whether it is of a piece of virgin land or of an auction-purchase holding. Thus salami landlord reiationship of antecedent to the constitution of landlord and the tenant to the landlord for being allowed to take posses In all sion of the land for cultivation under the lease. those cases under appeal the leases were oral and the regulated by duration and conditions Statute-The Assam Tenancy Act. Salami is not a recurring or periodical payment or a fee or fine levied at fixed intervals from the tenant for the same holding. In these cases it has not been contended or even suggested nor was tl1e Federal Court that salami is capitalised rent. As a matter of fact the Federal Court found that it was not rent. In consideration of the payment of salami an estate in tenant to · the landlord the land although the estate taken by the tenant · in the first instance is a non-occupancy tenancy which grows into an occupancy tenancy by the efflux of time. But in no case in any of the appeals was action taken under s. 69 of regulates the Assam Tenancy Act which the rights and liabilities of non-occupancy tenants and no tenant was ejected from his non-occupancy tenancy. On the other hand whenever action had to be taken for non-payment of rent and ejectment it was taken

it contended before

transferred by

thereof were

is

1957

Tbt MmiMr for t/u ·Botml of Agricultural Income T wt, A.sstlln v. SmJ. Sindhunmi Chaudhurani

EafJVr J.

1026

SUPREME COURT REPORTS

[1957]

under s. 68 of the Goalpara Tenancy Act. This section is as follows :

the

but his

landlord himself and

A permanent tenure-holder, a raiyat at fixed rates, or an occupancy tenant, shall not be liable to ejectment for arrears of rent, tenure or holding shall be liable to sale in execution of a decree for the rent thereof, . and the rent shall be a first charge thereon. In execution of decrees for arrears of rent the estates in of the occupancy tenants were sold, the purchaser all cases being for thus recovering the arrears of rent the landlord had to bring to sale the right, title and interest of his tenant and after purchase of this right he relet the land, on receiv ing the salami from the new tenant. This process again shows that the landlord did part with some interest in land, which cannot be said to be precarious, when he made the settlement of land on receipt of .<alami, which was a single non-recurring payment by the lessee for the is claimer! by lease. the Board comprises salami, has been in defined s. 2(a)(i) of the Act. The relevant portion of this $ection is :

the acquisition of his rights under

income" which,

"Agricultural

it

S. 2(a)(i). Any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land revenue in Assam or subject to a local rate assessed and collected by officers of the Govern ment as such.

Salami it will not fall within this definition.

is not rent and, therefore, unless it is revenue

"Income" was described by Sir George Lowndes in Commissioner of Income Tax v. Shaw Wallace & ) as· "a periodical monetary return coming in with Co. ( 1 some sort of regularity, or expected regularity, from definite sources." In Captain M aharai Kumar Go pal Saran Narain Singh v. The Commissioner of Income Tax, Bihar & Orissa( 2 ), Lord Russell of Killowen after referring to the definition given by Sir George Lowndes held that life annuity paid out of an estate is income.

(1) (1932) L.R. 59 I. A. 2o6, 212.

(2) (1935) L.R. 62 I.A. 207.

1957

The Memb<r ]or lhe Board of Agriwltural lnc011M Tax, AsJam v. Smt. Si11dhurani l'liaudht1ra1li

Kapur].

S.C.R.

SUPREME COURT REPORTS

1027

Salami was described by Lord Wright in Kamakshya Narain Singh v. The Commissioner of Income Tax(1 ), a ca~e of a grant of a mining lease for a period of 999 years, in the following words :

receipt.

the acquisition of

treated as a capital

"The salami has been, rightly, in their Lordships' opinion, It is a single payment made right of the lessees to enjoy lease. That general right may properly be regarded as a capital asset, and the money paid to purchase it may properly be held to be a payment on capital account."

for the benefits granted to them by

the

The importance lies in the use of the words "the money. paid to purchase it'', i.e., the right of the lessee to enjoy the· benefits granted under the lease.

In Raja Shiv Prasad Singh v. The Crown(2) where also the lease was a mining lease 'for a period of 999 years, salami was described as a sum which is payable at the inceptioq of the lease and as a non-recurring payment in the nature of a premium for granting a lease:

the

instalments

In Commissioner. of Income Tax v. Maharajadhiraj an area measuring 4i Kumar Visheshwar Singh( 8 ) bighas of land was settled for an indefinite (bemead) period on a yearly rent and in the event of default of lessee could be dis two consecutive possessed and was also liable to other penalties. This land was settled with the lessee to enable him to build a "gola house" and a platform for the rice mill. The lease was taken to be in the nature of a permanent lease and it was held that salami represented the price for parting with advan:::e rent and as it was not a recurring payment, it did not fall within the definition of the word 'income' as given in Commissioner of Income Tax v. Shaw Wa.1/ace & Co.( 4 ). Manoharlal J. who gave a con current judgment, at page 824 described salami as the amount of money which a landlord "insists on receiv ing as a condition precedent for parting with the land that salami in favour of the lessee." He also held (3) (1939) l.L.R. 11! Patna 805. (4) (1932) L.R. 59 I.A. 206, 212.

(1) (19!3) L.R. 70 I.A. 180, 190. (2) (192.1) I.L.R. 4 P;ltna 73-

land was

not merely an .

the

1957

The Afember. for the Board of Agricultural l11come Tax, AsJam v. Smt. Si11dhurani Chmufh11rani

Kapur,].

1028

SUPREME COURT REPORTS

[1957]

could not be treated as a revenue receipt and that it was received by the landlord "not because of the use of the land but before the land was put into use by the in Province of Bihar v. assessee." The same court M aharaja Pratap U dai Nath Sahi Deo ( 1 ) followed the definition of the word in Kumar that Vishesluvar Sing/i's case. Harries C.J. there held rent where salami cannot be regarded as payment of in advance, it will not be income and would, therefore, not be taxable. He said "prima facie, salami is not income, and it is impossible upon the facts as stated to that salamis received ............ constitute part of say , h.is. income."

'salami' as given

Rankin C.J. in Re Gooptu Estate Limited( 2 ) held payment of one lakh of rupees as salami not to be in income. respect of resettlement of a lease which had still to run for 48 years but had been forfeited for the non-pay ment of rent.

In that case it was demanded and paid

)

is

for

In certain cases, however, payment by way of salami In Birendra has been held to be 'agricultural income'. it Kishore Manikya v. Secretary of State for India( 3 the grant of a was held that the consiclcration the capitalised value of the sum periodicallv lease payable along with the premium so that "the larger the one element the smaller. the other." On this basis the premium paid for the settlement of waste lands or regarded 'as rent or revenue' abandoned holdings was derived from land and therefore within the definition of agricultural income in section 2 ( 1) (a) of the Indian Income Tax Act. This was a case which was decided under the Indian Income Tax Act and the question whether it was a capital receipt or revenue receipt and therefore exempt or not from taxation did not arise because the Bengal Agricultural Income Tax Act was passed It was not necessary for the purpose of to decide whether it was a capital receipt or revenue because to be decided was whether salami was what was

the Assam Act in 1939.

in 1944 and

that case

(1) (1947) I.L.R. 20 Patna 699, 722. (2) (1929) 50 C.L.J. 375·

(3) (1920) I.L.R. 48 Cal. ,SG.

1957

'

Th • Member for tire Board ef Agricu/t1Jra/ Income Tax, Assam v. Smt. Sindhurani Chaudhurani

Kapur].

S.C.R.

SUPREME COURT REPORTS

1029

in

that

exempt from incomeotax under. s. 2(a) (i) of the Indian the assessee Income Tax Act. As a matter of fact constituted argued case the income". Moreover "agricultural salami the higher the rent and vice-versa smaller the did not receive acceptance by the Federal Court when the present matter was heard in that court before remand

sums the dictum

(C.A. No. 30 of 1949).

these

that

to

the

In Meher Bano Khanum v. Secretary of State for 'salami' was defined to be an amount received India( 1 ) by the landlord for the recognition of the transfer of a land non-transferable holding which was paid lord because of his ownership of the land. It was held to be "agricultural income" as it was "rent or revenue" within the meaning of that expression. The Standing in Counsel who appeared for that case conceded that it was not revenue but his argument was that it was not revenue derived from land but that it was an incident of the transfer and flow from the not of tenancy and therefore· · did not land. In neither of these cases was it argued whether salami was a revenue receipt or capital receipt.

the Secretary of State

In a Full Bench of the Patna High Court in Raja Rajendra Narayan Bhanja Deo v. Commissioner of Income Tax(~ ) mutation fees were held to be agri;:ul income but that was a case of payment after tural tenant had come landlord and the relationsh:p of into existence. Similarly in of Income Tax v. K. C. Manavikrarnan Raja!i(3) monies paid for the renewal of leases were held to be agricul tural income within the meaning of s. 2 ( 1) (a) of the Indian the monies were paid not for the constitution of the relationship of landlord and tenant but after that relationship had come into existence and for its continuance.

Income Tax Act. Here again

the Commissioner

In H. H. Maharaja Sir Bir Bikram Kishore Manikya Bahadur v. The Province of Auam(' ), a case under the Act, Harries C.J. to Kamakshya Narain Singh's case( 5 ) and held that it had to be decided on

referred

(1) (1925) I.L.R. 53 Cal. 34· (2) (1929) I.L.R. 9 Patna 1. (3) I.L.R. 194 5Mad. 837.

(4) (1948) 53 C.W.N. 164. (5) (1943) L.R. 70 I.A. 180, 190.

1957

T ht Member for t/u Board of Agricultural Income Tax, A.1.ram v. Smt. Sindhurani C/ulUdhurtmi

Kapur].

1030

SUPREME COURT REPORTS

[1957]

the facts of each case whether salami was agricultural income or not because it was not known in respect of what transaction the am.ount was received.

The Orissa High Court in S. M. Bose v. Secretary, ·

) has held that salami

is not a Board of Revenue( 1 payment of rent in advance nor is it income but is a payment by way of capital receipt. It was contended before us that the Privy Council in Kamakshya Narayzn Sing h's case( 2 ) based its decision on the wasting nature of the assets under the lease. But the definition given by Lord Wright is in general terms and just describes what the characteristics of a payment by way of salami are without any reference as to the nature of assets under a lease.

·

large amounts of income

In all these appeals before us the assessees derived from agricul considerably tural holdings. It is not shown as to what the number of the holdings were but they must have been consider ably large. On the oth~r hand the number of settle ments was comparatively small-a few hundreds and consisted of settlements of virgin lands as well as of auction;purchase lands and were not derived from the same holdings at regular intervals. This and the find ings of fact given above negative the finding as to "regularity and periodicity" of pa,yment of salami and also that it "arose out of business of letting out his land," The payments by 'way of salami were made lessees anterior to the constitution by of the relationship of landlord and tenant as the price for the lessor agreeing to the parting of his rights in an agricultural holding in favour of the proposed lessee.

the prospective

In Principles of Mohamadan Law by Macnaughton

salami is-defined as;

"a free gift by way of compliment or in return of

a favour." In Wilson's Glossary the meaning given to it is :

"a complimentary present, a douceur. ........... ; a present to a superior upon being introduced to him; a gratuity or offering on receiving a lease ...... "

(1) A.LR. 1955 Orfosa 288.

(2) (1943) L.R. 70 I.A. 180, 190.

Tiii Member for lh1 Board sf ..4gri&u/lurtil Incom1 Ta:c, Ars•m v. Smt. Sindhurani CAautlhurai

Kapur J

S.C.R.

SUPREME COURT REPORTS

1031

the Arabic-English Dictionary by

In means:

Johnson

it

t957

" ........ a present on being introduced to a superior; earnest money ; a free gift from a farmer to Govern- ment on taking lands .......... " In Vol. I of Baden Powell's "Land Systems of British Inclia" it is stated at page 543;

" ...... the Zamindar, to raise money, had sold so 'salami' or fees paid

many taluqs or under farms for down .... "

Thus all these definitions show that salami is a payment by the tenant as a present or as price for parting by the . landlord with his rights under the lease of a It is a lump sum payment as consideration holding. for what the landlord transfers to the tenant.

the

fact

The manner in which the leases were dealt with that in no case was a non-occupancy and tenant evicted and his tenure was allowed to mature into an occupancy holding shows that the leases were •in practice not so precarious as was suggested by the · Board, but had an element of stability and perma nency attached to them. Therefore, when a tenant paid salami he did so in order to get in return an estate in the land owned by the zamindar. Salami is thus not rent and both parties have proceeded on that basis and the meaning of it could not be called revenue within the word used in the definition of agricultural income under s. 2(l)(a) of the Act because it was a payment to the the landlord by for transfer of a right in zamindari lands owned by the the charactenstics of a therefore all landlord. capital payment and is not revenue.

the tenant as a consideration

It has

In the result appeal No. 162 of 1955 brought by the State of Assam is dismissed with costs throughout and the appeals brought by the assessees in C.A. Nos. 38 to 44 of 1956 are allowed, the judgment of the High Court set aside and the referred questions answered the negative. The assessees will have their costs in this court in one set and the courts below except in appeal No. 42 of 1956 where the appellant was not present. ~IS. C. India/59

in

1957

Flu Member for l/u Board of Agrici.:ltural Income Tax, A.Ham v. Smt. Sindhurani Chaudhurani

Kapur J. 1957

Apil, 25

1032

SUPREME COURT REPORTS

fl957]

but it appears that she could not be served and given notice of therefore, the hearing of the appeal and, although her appeal is allowed, as it is based on a point their com,non to other appeals, own co'ts in that appeal.

the parties will bear

Appeal No. J(,2 of 1955 dismissed. Appeals Nos. 38 to 44 of 7956 allowed.

BASH!RUDDIN ASHRAF v. THE STATE OF BIHAR ( S. R. DAS C.J., JAF!'AR IMAM, s. K. DAS, GOV!NDA MENON and A. K. SARKAR JJ.)

powers

i\!t!tatvalli-A.fajlis,

fai/u,·e to prcpart• and send copy to Afaj/is-Coni·ictio'1-Validity-Sentence of fine, in default imprisonment-Legali:y-l?ihar TVaqfs Act, 1947 (Bi*ar Act 8 of 1948), ss. 58, 65-Con.ctitution of India, Art.,. 19 (!) (g).

of-Budgct-Mutatva//i's

6--5( I) of

the Magistrate under s.

The appellant failed to prepare a bud_gct of the Waqf Estate of \Yhich he \Vas the mutawalli, for the year 1952-53 and send a :is he was hound copy of it to the Majlis· before J:-inuary 15, 1952, llihar Waqfs Act, 1947, ond \•:as to Jo unJt•r s. 58( I) of the convicted hy :inJ stntcncc<l to pay a fine of Rs. iOO, in default to nn(~crgo fifteen for him that the cbyc; -~iriplc imprisonment. thi.: con\·iction and sentence Act contravened Art. I9(1)(g) of the Constilution of India, :?.'i it g:ivc unrestricted po\ver to the budget prepared by right of appc:II against the action of the ?i.1ajlis and so in1poscd an unreasonable occup:ition as restriction on such, :Ind (2) s. 65 of the Act did not provide for any impri~on­ ment in default of payment of fine.

the Majlis the muta\valli without a

\Vere nor \·al id ber:iuse (I) s. ;g l)[

to alter or modify

in c1rrying on hi.o;

It was contended

the muta\valli

J\ct

the

to

the

regard

lleld, that hav1ng

a muta\\':tlii th:-it occupies the position of a man:igcr or custodian and supervi the sin:i over him by the :tvfaj!i<; with the respect to due administration of the 11owers of the !'vfajlis the \vaqf property is neccss:iry and that the mutawalli are to olter or modify restrictions controlled by sub-s. ( 6) of s. 58 of the imros-:d by the exercise of his powers

the budget prepared by

58 of the Act on

the Act.

fact

s.