These four appeals are brought from judgments of the High Court of Judicature at Patna whereby four separate References made to that Court under section 66(1) of the Indian Income-tax Act, 1922, as amended, were answered in favour of the assessees the respondents to the several appeals.

All appeals raise the question whether interest on arrears of rent payable in respect of land used for agricultural purposes is exempt from income-tax as being agricultural income within the definition of that phrase contained in section 2(1) of the Indian Income-tax Act. In the second appeal a further question is raised to which their Lordships will refer later.

Under section 4(3)(viii) of the Indian Income-tax Act, 1922, agricultural income is exempt from assessment to income-tax. Agricultural income is defined in section 2 of the Act as follows:-

(1) “agricultural income” means-

"(a) any rent or revenue derived from land which is used for agricultural purposes and is either assessed to land revenue in British India or subject to a local rate assessed and collected by officers of the Crown as such.

It is not necessary to state in detail the facts bearing on this first question In each case there was included in the assessment of income made upon the assessee interest in respect of arrears of rent payable for land which was used for agricultural purposes and was either assessed to land revenue or subject to a local rate. That interest had been paid. The interest was, their Lordships understand, payable in all cases by virtue of various statutes which prescribed that interest should be payable on rent in arrears. The point put baldly is therefore”is such interest, rent or revenue derived from land?"

There is a diversity of judicial opinion as to the correct answer to this question. The High Court of Calcutta (cf. In re Manager, Radhika Mohan Roy Ward’s Estate1) and the High Court of Madras (cf. Pethaperumal Chettiar v. Commissioner of Income-tax2) have answered this question in the negative.

The High Court of Allahabad (cf. Sarju Bai v. Commissioner of Income-tax3) and the High Court of Patna (cf. Maharajadhiraja Kumari Srimathi Lakshmi Daiji v. Commissioner of Income-tax4 and the cases here under review) have answered it in the affirmative.

This difference of opinion is not surprising for as Braund, J., truly points out in Sarju Bai v. Commissioner of Income-tax3 the matter is almost one of first impression.

The observation of Braund, J., has as its background the fact that none of the other provisions of the Income-tax Act throws any light on the construction or meaning of the definition. The point therefore lies within a very small compass.

The conflicting points of view are put with clarity in the judgment of Braund, J., in Sarju Bai v. Commissioner of Income-tax3, at pp. 144-145, where he expresses himself as follows:-

"The argument on the one hand is that interest payable (whether by statute or not) on arrears of rent which have already become a debt due is not referable in any way to the agricultural relationship of landlord and tenant, but is attributable solely to their character as creditor and debtor. It is said that interest is in its nature merely that commercial compensation which either the accepted practice of business or in some cases the legislature has adopted to see that a creditor does not suffer from the default of his debtor. That, it is said, has nothing whatever to do with the relationship of landlord and tenant and, therefore, is not in any way derived from the agricultural land which is the subject-matter of the tenancy. That is one way of putting it. The other way of putting it is that interest on arrears of rent is something which in this case has been introduced by the United Provinces Tenancy Act as a condition of the relationship between landlord and tenant. Arguing from that, it is said that, whether or not such interest can be strictly classified as rent, it certainly can be classified as coming within the