Malikana does not qualify as agricultural income under the Bihar Agricultural Income-tax Act, 1938, as it does not meet the criteria of being rent or income derived from land used for agricultural purposes.

Agarwala, J.

1. This is a reference under Sec.25 (2), Bihar Agricultural Income-tax Act, 1938, at the instance of Maharaja Pratap Singh Bahadur through the Manager of the Gidhour Court of Wards Estate.

2. For the year 1942-43, the assessees net agricultural income for the year ending 31st March 1942, was assessed at Rs. 1,52,634 which included a sum of RS. 14,359-9-9 received from Government as malikana, In appeal this was reduced and the case was remanded for revision of the assessment after reconsideration of certain items with which we are not concerned at present. The assessees claim that the sum received as malikana was not assessable was rejected. 2a. The question referred to us for deci- and is:

"Whether income received as malikana sion paid by Government under Regulation VII [7] of 1822 is agricultural income assessable to agricultural income-tax ?" On the ground that malikana is not agricultural income the amount received by the assessee on this account has been assessed to tax under the general Income-tax Act which exempts agricultural income from taxation, it having been held that it is not agricultural income within the meaning of the Income-tax Act, 1922, which defines agricultural income as--"Any rent or revenue derived from land which is used for agricultural purposes. ........" For the purposes of the Bihar Agricultural Income-tax Act, 1938, however, it has been held that malikana is agricultural income, with the result that the recipient has again been assessed on the amount received. The Bihar Agricultural Income-tax Act, 1938, defines agricultural income as--"Any rent or income derived from land which is used for agricultural purposes, ......."

3. Although, in one Act the word "income" is used, and in the other, the word "revenue", there is no real difference in the two definitions.

4. In order to bring the sum received as malikana within the definition of agricultural income-tax the Revenue Authorities must show either that it is rent or that it is income derived from land used for agricultural purposes. It is, therefore, necessary to consider the nature of malikana. In 1793 the then Government proposed to settle land with the then proprietors on terms which included the payment of revenue amounting to nine-tenths of the estimated yield. Regulation VIII [8] of that year provided that the lands of those proprietors who refused to enter into engagements on those terms should either be let in farm or held khas by Government and that the dispossessed proprietors should be paid by Government an allowance in consideration of their proprietary right at such rate as the proper authority might determine. This allowance was called malikana. In the case of lands let in farms the person with whom they were settled was required to pay to Government, in addition to the revenue settled, an additional sum which Government itself would have to pay to the dispossessed proprietor as malikana. It appears, however, that even before the enactment of the Regulation of 1793 some zamindars were in receipt of malikana. This is dealt with in Phillipss "Land Tenures of Lower Bengal," pp. 124 to 126. The learned author says,

"It has been questioned whether a zemindar could be ousted ...... It was however probably only in later times, when the zemindars rights were at their highest pitch, that dismissal was so rare; for we know that during the vigorous times of Mahomedan rule, the zemindars were often expelled ..... The claims of the ancient zemindars and village headman, when thus displaced, were usually recognized to the extent of giving them an allowance for subsistence; and sometimes they continued to receive this allowance in the shape of payments from the new occupants called russoom-i-zemindaree. This practice probably accounts for the payment, to a displaced zemindar by his successor, of malikana for the subsistence of his family ....... Some times, when the zemindar was incompetent, Government appointed an officer to ta