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Issues:
1. Interpretation of the term "revenue" in Section 6(a) of the Bihar Agricultural Income-tax Act. 2. Entitlement of assessees to deduct agricultural income-tax paid for the previous year in computing net income for the current year. Analysis: 1. The primary issue in this case revolves around the interpretation of the term "revenue" in Section 6(a) of the Bihar Agricultural Income-tax Act. The reference sought clarification on whether the term "revenue" is limited to land revenue only or includes all revenues as defined in Section 136 of the Government of India Act. The assessee argued that agricultural income-tax paid in the previous year should be considered as revenue to the Crown. However, the court upheld the assessing authorities' view that "revenue" in this context refers specifically to land revenue and does not encompass income-tax. The court relied on English legal principles, emphasizing that income-tax is a share of the Crown in the assessee's income and cannot be treated as an expenditure necessary to earn income. The judgment cited various English cases, including Attorney-General v. Ashton Gas Co., to support this position. 2. The second issue addressed in the judgment pertains to the entitlement of assessees to deduct agricultural income-tax paid in the previous year when computing net income for the current year. The court reiterated that income-tax, including agricultural income-tax, cannot be deducted from assessable income as it represents the Crown's share of profits and is not an expense necessary to earn income. Referring to Indian and English legal precedents, the court emphasized that income-tax is a compulsory payment and forms part of the profits themselves. Therefore, the court ruled against the assessees' claim to deduct agricultural income-tax paid in the previous year when calculating net income for the current year. 3. Additionally, the judgment delved into the legislative intent behind the term "revenue" in the Act, highlighting that it pertains specifically to land revenue assessed and paid for the land from which agricultural income is derived. The court rejected arguments that sought to broaden the definition of "revenue" by referencing other statutes, emphasizing the need to interpret the term within the context of the present Act. By analyzing the provisions of the Indian Income-tax Act and relevant legal principles, the court concluded that the term "revenue" in Section 6(a) of the Act is confined to land revenue and does not extend to all revenues as defined in the Government of India Act. In conclusion, the judgment clarifies the scope of the term "revenue" in the Bihar Agricultural Income-tax Act and reaffirms the principle that income-tax, including agricultural income-tax, cannot be deducted when computing assessable income. The decision underscores the distinction between revenue sources and emphasizes the statutory framework governing agricultural income taxation.
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