Srinivasa Ayyangar, J.
1. The question referred in this case for the opinion of the High Court is as follows: 'If an assessee takes a usufructuary mortgage from a mortgagor and leases it back again to that person receiving rent from him, is that rent assessable to income tax?' When the case came on at first before three of us, on hearing arguments to some extent, it became clear that the decision and opinion of the three judges of this Court in Income-tax Referred Case No. 18 of 1925 required re-consideration and it was thereupon this case was directed to be posted for being heard before a bench of five judges. It is correct as pointed out by the Income-tax Commissioner in his letter of reference that the question proceeds on the assumption that the subject-matter of the mortgage is land used for agricultural purposes and either assessed to land revenue in British India or subject to a local rate assessed and collected by Officers of Government as such in the language of Section 2 (1) (a) of the Income-tax Act. We are now satisfied that the answer to the reference in the case above referred to was given without full discussion or consideration. Section 6 of Income-tax Act XI of 1922 is the charging section. Though in that section interest on securities, property, business and other sources of income are all indicated as heads of income chargeable with income-tax, still the section begins with the words 'Save as otherwise provided by this Act'. In Clause 3 of Section 4 it is, however, provided that the Act shall not apply to certain classes of income and the Sub-clause 8 thereof is ' agricultural income'. It follows from this that the classes of the incomes specified in Section 6 are liable to the tax only subject to the exceptions set out in Section 4, Clause 3; in other words, even though some income is capable of falling within one or more of the classes assessable to income-tax under Section 6, still if such income should also 'be agricultural income the same will be exempt from assessment. The expression 'agricultural income' is defined by Section 2, Clause 1 as including any rent or revenue derived from land which is used for agricultural purposes. Section 2 which is the definition section in the Act, as usual in all enactments, sets out the definitions with the qualification 'unless there is anything repugnant in the subject or context'. It was argued by Mr. Patanajali Sastri for the Commissioner that as in Section 10 read with Section 6 the Act provides that the tax shall be payable by an assessee under the heading of 'Business', in respect of the profits or gains of such business, the exemption under Sub-clause 8 of Clause 3 of Section 4 of agricultural income, must, having regard to the context, be construed as referring only to such agricultural income as is not capable of being properly designated as income from business. There is no warrant for such a contention. The expression 'agricultural income' in Section 4 has no special context apart from all the classes of income exempted from assessment, and the expression 'agricultural income' the definition of which is in question does not occur in any context in either Section 6 or Section 10. It is a well-established cannon of interpretation that any question of context or repugnancy in the subject can arise only if the same expression that is defined occurs or is repeated in any particular section. The only question is whether,, having regard to the facts of this case,, the rent accruing to the mortgagee from agricultural land is or is not liable to exemption as agricultural income. It has been assumed for the purposes of the reference that the lands are used for agricultural purposes and the income under reference is the amount agreed to be paid as rent by the mortgagor-lessee in respect of such lands. Having regard to the amount reserved as rent under the lease-deed there can be no question that it is rent derived from land which is used for agricultural purposes. There can be no question also in this case of the motives of the assessee in bringing about a particular arrangement, because as has been pointed out by the House of Lords in more than one case it is not proper to take such motives or objects into consideration, and a subject is entitled, if he can in any legal manner, to circumvent the incidents of a particular taxing or financing Act. According' to Section 6, income from business is assessable only if it be not agricultural income, and to invert this and contend, as was argued in this case, that agricultural income will not be exempt from assessment if it be business income would lead to a complete deadlock. We must take it that the usufructuary mortgage referred to in the question is a simple or pure usufructuary mortgage and that there is no stipulation as to any interest and that the income accruing from the properties mortgaged is to be taken and enjoyed by the mortgagee with possession. No doubt as indicated in the question itself the land subject to the mortgage is leased back again by the mortgagee to the mortgagor and therefore even reading both the instrument of mortgage and the instrument of lease together as indicated by the Judicial Committee in Abdullah Khan v. Bashart Husain it must appear that the amount sought to be assessed is legally only rent. If it be rent and in this case there is nothing to show that it is anything else, then on the considerations set out already it follows that it is not assessable, Our answer therefore to the question referred is in the negative.
The assessee will have his costs, which we fix at Rs. 300.
2. The question for decision is., shortly, whether a money lender who enters into a familiar form of transaction, a mortgage and lease back, is exempt from paying income-tax upon its proceeds. I could understand the assessee's claim if the transaction were strictly divided into two parts.... First as usufructuary mortgagee he enters into possession of the property, and looks to its agricultural yield for his interest; then he prefers to realize that yield by putting a tenant into possession and enjoying the rent. But this division into two parts was not held to be the correct method of interpretation by the Judicial Committee in Abdullah Khan v. Bashart Husain where it ruled that the mortgage and lease were parts of one and the same transaction. Viewed as a whole the transaction is one by which the money lender obtains interest on the money advanced; there was never any real transfer of possession, and the so-called rent has nothing to do with agricultural purposes, being entirely based upon the money lending firm's rate of interest. In my opinion it is not agricultural income but profits of business and therefore not exempt. A full bench of this Court held the same view in R. C 18 of 1925 and I am not persuaded that that decision is wrong.