TMI Blog1957 (4) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... alami is thus not rent and both parties have proceeded on that basis and it could not be called revenue within the meaning of the word used in the definition of agricultural income under section 2(1)(a) of the Act because it was a payment to the landlord by the tenant as a consideration for the transfer of a right in zamindari lands owned by the landlord. It has therefore all the characteristics of a capital payment and is not revenue. Questions answered in the negative. - - - - - Dated:- 24-4-1957 - Judge(s) : BHAGWATI., KAPUR., VENKATARAMA AIYAR JUDGMENT The Judgment of the Court was delivered by KAPUR, J.---In all these appeals the question for decision is the character and purport of the payment termed "salami" and whether it falls within the meaning of "agricultural income" as defined in the Assam Agricultural Income-tax Act (Ass. IX of 1939) hereinafter called the "Act". C. A. No. 162 of 1955 is directed against the judgment of the Calcutta High Court dated 15th January, 1953. C. A. Nos. 38 to 44 of 1956 have been brought against the judgment of Assam High Court dated 2nd April, 1952. These matters were all heard together in the Assam High Court and were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The number of settlement of waste lands and abandoned holdings during the accounting year and the maximum and the minimum extents settled and salami received. 2. Does the salami vary with the quality of the land, the facilities for irrigation and such other favourable factors ? 3. Flow many tenants ejected under section 69 during the accounting year and how long they had been in occupation before such eviction ? 4. Is salami received when lands are re-let after eviction ? 5. Is salami that is paid in the zamindary of the assessee in the nature of a 'present' given by the 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 tenancy ?" After the remand the case was again stated by the Member of Assam Board of Agricultural Income-tax, Dr. Goswami, and answers to these questions were : " 1. Total number of settlements were 414, maximum extent being 59 bighas 2 Cottahs and 10 Dhurs, and salami Rs. 161-8-6- 1/4 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 bigh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he demand, depending upon the quality of land and facilities for irrigation. Similarly in the Chaper Trust estate holdings were 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 of land 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 Rs. 3-5-0. Between these two extremes the extent of areas settled varies. " There were no evictions under section 69 of the Assam Tenancy Act of non-occupancy tenants but ejectments did take place and action was taken under section 68 of the Act. After the re-statement of the case on the lines suggested by the Federal Court, the Assam High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses under appeal the leases were oral and the duration and conditions thereof were regulated by 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 it contended before the 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 land is transferred by the landlord to the tenant 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 section 69 of the Assam Tenancy Act which regulates 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 under section 68 of the Goalpara Tenancy Act. This section is as follows: A permanent tenure-holder, a raiyat at fixed rates, or an occupancy tenant, shall n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 inception of the lease and as a non-recurring payment in the nature of a premium for granting a lease. In Commissioner of Income-tax v. Maharajadhiraj Kumar Visheshwar Singh an area measuring 4 1/2 bighas of land was settled for an indefinite (bemead) period on a yearly rent and in the event of default of two consecutive instalments the lease could be dispossessed 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 the land and was not merely an advance 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 Wallace Co. Manoharlal, J., who gave a concurrent judgment, at page 553 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e versa, did not receive acceptance by the Federal Court when the present matter was heard in that Court before remand (C.A. No. 30 of 1949). In Meher Bano Khanum v. Secretary of State for India, salami was defined to be an amount received by the landlord for the recognition of the transfer of a non-transferable holding which was paid to the landlord 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 counsel who appeared for the Secretary of State in 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 not of tenancy and therefore did not flow from the land. In neither of these cases was it argued whether salami was a revenue receipt or capital receipt. 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 agricultural income but that was a case of payment after the relationship of landlord and tenant had come into existence. Similarly, in Commissioner of Income-tax v. Manavikraman Rajah mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troduced to him; a gratuity or offering on receiving a lease ................. " In the Arabic-English Dictionary by Johnson it means : " .............. a present on being introduced to a superior; earnest money ; a free gift from a farmer to Government on taking lands .........." In Vol. I of Baden Powell's "Land Systems of British India" it is stated at page 543 : " .............. the zamindar, to raise money, had sold so many taluqs or under-farms for 'salami' or fees paid 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 holding. It is a lump sum payment as consideration for what the landlord transfers to the tenant. The manner in which the leases were dealt with and the fact that in no case was a non-occupancy tenant evicted and his tenure was allowed to mature into all 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 permanency attached to them. Therefore, when a tenant paid salami he did so in order to get in return an estate in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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