1. This is a reference made by the First Class Subordinate Judge of Surat under Order XLVI, Rule 1, of the Civil Procedure Code, and arises out of an appeal pending before him under Section 9 of the Bombay Agricultural Debtors' Relief Act. In the-statement of facts of the case drawn up by him he has said, that he entertains a doubt about the correct interpretation of the word 'income' in the definition of the word 'debtor' in Section 2, Sub-section (6)(a)(iv), of that Act, but he has expressed no opinion of his own as required by Order XLVI, Rule 1, of the Code of Civil Procedure. The appellant, claiming to be a debtor, made an application to the Debt Adjustment Board at Bulsar Under Section 17, Sub-section (1), of the Bombay Agricultural Debtors' Relief Act, for the adjustment of his debts. The Board held that he was not a debtor since his annual income from sources other than agriculture exceeded Rs. 300. 'Debtor' is denned in Section 2(6)(a)(iv) as meaning 'an individual (i) who is indebted, (ii) who holds land used for agricultural purposes, (iii) who has been cultivating such land personally from a date prior to April 1, 1937, and (iv) whose annual income from sources, other than agriculture and manual labour does not ordinarily exceed twenty per cent of his total annual income or does not exceed Rs. 300 whichever is greater.' In the opinion of the Debt Adjustment Board, the appellant does not fulfil the fourth condition for being a debtor. He has, at present, no land of his own, but has taken on lease twenty-four lands of his brother assessed at Rs. 68-4-0 on a rent of Rs. 300 a year. Out of those lands, he personally cultivates an area of 10 acres and 23 gunthas and has sub-let the rest, He admits that he, gets an income of Rs. 200 from the former and Rs. 460 or Rs.- 570 from the latter. According to Explanation 1 to Section 2, Sub-section (6) of the Bombay Agricultural Debtors' Relief Act, 'agriculture' does not include leasing of land. Hence income derived by the appellant from the lands leased out to tenants is to be treated as 'income from sources other than agriculture and manual labour,' and if it exceeds Rs. 300 a year, the appellant will not be deemed to be a debtor as defined in Section 2, sub-s. (6)(a)(iv).
2. In appeal it was contended before the learned Subordinate Judge that out of Rs. 460 or Rs. 570 realised by him from the lands sub-let, he had to pay Rs. 300 to his own landlord, and thus his net income was less than Rs. 300 a year. The learned Judge could not make up his mind as to whether the word 'income' used in Section 2, Sub-section (6)(a)(iv) meant gross income or net income, and so he has made this reference.
3. The word 'income' standing by itself, is capable of meaning either gross profit or net profit and has, therefore, to be interpreted with reference to the context. In common parlance, however, income is understood to mean net income. In Lawless v. Sullivan (1881) 6 A C. 373 the Privy Council had to interpret the word 'income' for the purpose of taxation, and their Lordships said (p. 384):.there is nothing it the enactment imposing the tax, nor in the context, which should induce them to construe the word 'income' when applied to the income of a commercial business for a year, otherwise than in its natural and commonly accepted sense as the balance of gain over loss..
This interpretation was adopted by the Madras High Court in Municipal Council of Mangalore v. The Codial Bail Press I.L.R (1903) Mad. 547 and in Arunachallam v. Namakkal Union Board A.I.R  Mad. 346. In Russell v. Town and County Bank (1888) 13 A C 418, Lord Herschell observed (p. 424):
The profit of a trade or business is the surplus by which the receipts from the trade or business exceed the expenditure necessary for the purpose of earning those receipts. That seems to me to be the meaning of the word 'profits' in relation to any trade or business. Unless and until you have ascertained that there is such a balance, nothing exists to which the name 'profit' can properly be applied.
4. The same principle applies to income from any other sources unless it appears from the context that gross income is intended. In the present case, the lands do not belong to the appellant. He has taken them on lease on condition of paying a rent of Rs. 300 and sublet them in the expectation of getting something more from his Sub-tenant. He may as well ask his sub-tenant to pay his landlord the stipulated rent directly and may recover only the balance from him. It is this balance which comes to the hands of the appellant for his own use. In Chunilal v. Vinayak I.L.R (1909) Bom. 376 a similar view was taken in interpreting the word 'agriculturist' under the Dekkhan Agriculturists' Relief Act and in finding out whether the income from agricultural source exceeded the income from non-agricultural sources, the expenses incurred in getting that income, the assessment and expense of cultivation were deducted before arriving at the income from the different sources. The obvious object of the definition is that he who earned reasonably enough from non-agricultural sources for maintaining himself should not be given the benefit of the Act. For that purpose, the income referred to must be what he can call his own and utilizes for his own livelihood. It is only the net income which can be so characterised. We, therefore, feel no doubt that the word 'income' in Section 2, Sub-section (6)(a)(iv), means net income and not gross income, and we answer the question referred to us accordingly.
6. Costs to be costs in the cause.