1. We have no doubt as to what the answer to this question must be. The assessee is the owner and occupier of certain land in the Agra District which contains valuable stone quarries. These he has been working at a profit for a very considerable time. In 1879 when the land in question was assessed for revenue purposes, the extract from the Settlement Officer's note which forms part of this case, shows that the revenue was assessed against the then owner, upon the basis of the rental value, arrived at by taking into account the profits which he was making from the working of the quarries. That would be quite correct if the problem to be solved was the rental value of the land. It was not cultivated land although it had been cultivated. The Settlement Officer says:
Large areas of cultivated land have been gradually absorbed by the quarries.
2. Taking into account the average income from the quarries, and adding it to the supposed rental value of the rest of the land, he arrived at an annual figure of Rs. 1,380. He does not profess to halve arrived at a really accurate figure. Indeed he says that the figures are below the mark, and that in later years the profits have very much increased. But whether the assessee has been paying too much or too little, there is no doubt that from 1879 he has been paying in the shape of revenue a contribution to the public funds, based upon the profits made from the quarries The question is whether that relieves him from the undoubted statutory duty of making a return of the profits which he makes from the quarries and of being assessed thereon for the purpose of income-tax.
3. As to his prima facie liability to pay income-tax upon the profits of the quarries, there can be no doubt. Section 4 provides for that in the plainest terms. Certain exemptions from liability to income-tax are provided in Section 4, and of these the only one material to this case is agricultural income. Therefore, we have to see whether the assessee can bring himself within the exemption. Agricultural income means rent or revenue derived from land which is used for agricultural purposes and is either assessed to land revenue or subject to a local rent collected by a company. Nobody can seriously contend that profits from the working of quarries and the sale of stone is agricultural income within the meaning of that definition, or that the quarries themselves are land used for agricultural purposes. The assessee, therefore, fails to bring himself within the exemption. His real complaint, of course, is that in being assessed for income-tax upon the profits derived from the quarries, he is paying to some extent twice over, but in order to obtain exemption from liability under the Income Tax Act he would have to show that there was some provision in the Act which exempted profits which had been either taxed or taken into account in assessing revenue for some other State purpose. There is no such provision in the Act.
4. The Income-tax Act is of a much later date than the Settlement in question, and, no doubt, the contingency which has occurred in this case, namely of an assessee paying already to some extent tax in respect of profits arising from his business, by reason of the fact that they had been taken into account in assessing revenue by the Revenue Authorities was overlooked. This, however, is no concern of the Income-tax Authorities, who have only to administer the Act as they find it. Whether, in view of the fact that a later Act has imposed a revenue tax upon the profits of the quarries, which the revenue authorities have already taken into account in assessing rental value for another purpose, affects the question between the revenue authorities and the present assessee in respect of his liability to pay revenue is a question which we cannot decide. We merely content ourselves with saying that unless there is some provision in the revenue law which makes it clear that a double tax is intended to be made in respect of such sources of profit, the assessee appears to have a strong ground for applying to the revenue authorities for re-consideration of the rental value, on the ground that part of the land in respect of which he has been assessed for revenue, has been assessed on the basis of the profits he is making from the working of the quarries, because the result of this decision will be, unless some amelioration is provided by the revenue authorities, that he will have to pay in respect of those profits twice over.
5. The answer to the question which is contained in para. 6 of the stated case is No.
6. Under the circumstances we think that both parties ought to pay their own costs, and we assess the fee of the Government Advocate at Rs. 100. Any amount deposited by the assessee will be returned to him.