P. Chakravartti, C.J.
1. This is a reference under Section 63(1) of the Bengal Agricultural Income-tax Act of a single question of law which relates to the computation of income derived from land by agriculture through cultivation thereof by adhiars. The facts stated to us by the Tribunal are as follows;
2. The assessee holds some agricultural lands in Cooch Behar which he cultivates through adhiars. The adhiars, as their name implies, receive for their labours a half-share of the produce grown, while the other half is received by the assessee. In the year 1957 B. S., relative to the assessment year 1951-52, the total yield of paddy from the assessee's lands was 4,500 maunds. After paying a half-share of that quantity to the adhiars, the assessee was left with 2250 maunds which he sold to the District Procurement agents at Rs. 7-15 per maund. In making the assessment, the Income-tax Officer took a view of the sales which was not accepted by the Assistant Commissioner and to which it is no longer necessary to refer. The Assistant Commissioner was satisfied from the papers produced before him that the entire quantity of 2250 maunds had been sold to the District Procurement agents, although, before the Income-tax Officer, the assessee himself appears to have tried to make a different case. The method followed by the Assistant Commissioner in computing the assessee's income from the lands was that he first determined the market value of the total yield of paddy, comprising both the share paid to the adhiars and the share received by the assessee, and then he allowed a deduction of one-half of that value in accordance with the proviso to Section 7(1) of the Act. The assessee next appealed to Tribunal and his contention in the appeal was that he was liable, under the opening paragraph of Section 7, to be taxed only on the income which he had received and therefore the share taken by the adhiars which he had not received ought to have been excluded from the computation altogether. The Tribunal did not accept that contention and upheld the method of computation adopted by the Assistant Commissioner.
3. The assessee next applied to the Tribunal under Section 63(1) of the Act for a reference to this Court of five questions of law. The Tribunal held that four of the questions did not arise out of the appellate order and could not be referred. It is stated that, ultimately, the assessee's Advocate did not press those questions. The fifth question was held to be a question of law, arising out of the appellate order and it was referred to this Court in the following terms:
'Whether on the facts and in the circumstances of the case, the basis and the method of computation adopted by the Assistant Commissioner, for the purpose of granting allowances for costs of production, and confirmed by the Tribunal, are in accordance with the provisions of the Bengal Agricultural Income-tax Act, 1944, and Rule 4 framed thereunder.'
4. Before taking up the question referred, I consider it necessary to point out that the contention raised by one of the questions which the Tribunal held not to arise out of the appellate order was that the position of an adhiar under the Cooch Behar Tenancy Act by which the assessee's lands were governed was quite different from the position of an adhiar under the Bengal Tenancy Act and that since he was not a servant or a hired labourer, the proviso to Section 7(1) of the Act could not be applied in computing the allowance admissible under the clause. Since that contention had not been raised in the course of the assessment proceedings and not even before the Tribunal at the appellate stage of the case, it was not included in the question referred. Our answer to the question will therefore be on the basis of the status of adhiars under the Bengal Tenancy Act, but it must not be understood to conclude any contention that may properly be raised in a future case on the basis of the special incidents of the status of adhiars, if there be any, under the Cooch Behar statute,
5. I have also to point out that the facts with regard to the assessee's sale of 2250 maunds of paddy to the District Procurement Agents are not altogether clear. The Assistant Commissioner found that '2,250 maunds of paddy was sold to the D.P. Agents at the rate of Rs. 7-15 per maund and of this quantity, only 2000 maunds was delivered within 1357 B.S.' On that finding, he valued 2000 maunds at the rate of Rs. 7-15 per maund at which the whole 2250 maunds had actually been sold, but valued the remaining 250 maunds at the open market rate of Rs. 20 per maund, apparently on the basis that that quantity had not been sold during the accounting year and had consequently to be valued under Rule 4 (2)(a) of the Rules as agricultural produce 'not sold in the market'. The Tribunal described the Assistant Commissioner's finding, which they accepted, as that '2,250 maunds of paddy were sold to D. P. Agents at the rate of Rs. 7-15 per maund, of which only 2000 maunds were delivered within 1357 B.S., and the balance of 250 maunds applied next year.' On that finding, the Tribunal also applied Rule 4 (2)(a) to the valuation of the 250 maunds, but they determined the value at the rate of Rs. 7-15 per maund in the view that a special local market had been brought into existence by the Food Grain Control Order and that the assessee had restricted his trading to that market. It is not very clear whether the sale had taken place in two instalments, 2000 maunds having been sold in 1357 B.S. and 250 maunds in 1358 or whether the whole quantity had been sold in 1357 and it was only the delivery which had been spread over the two years. If the latter was the case, the application of the rate of Rs. 7-15 to the 250 maunds might be correct, but it would not be a case under Rule 4 (2)(a) while, if the former was the case, the adoption of the procurement rate as the average price at which paddy had been sold in the market in the locality, while valuing the adhiars share of the paddy at the open market rate, might be open to question. I am expressing no opinion on this matter, since no question regarding it has been referred. If I am referring to it at all, it is because the Tribunal have mentioned in the Statement of the Case the different valuations of the 250 maunds of paddy made by the Assistant Commissioner and themselves, presumably for giving a complete narration of the facts, and it is therefore necessary to exclude all possibility of it being supposed that we are endorsing the Tribunal's decision in this regard.
6. Coming now to the short point involved in the question referred, it does not seem to me to present much difficulty. It is, however, much to be wished that the question had not been framed as it has been. At this stage no one is any longer concerned with what the Assistant Commissioner had done and the framing of a question by reference to the view taken or the method employed by him can only obscure the issue and cause needless complications. Nor docs it make for clarity to refer simply to the method adopted by the Assistant Commissioner, without stating what that method was, and leave this Court to make its own discovery of the method from judgments which are none too perspicacious. When framing questions for this Court, the Tribunal will be well advised to limit itself to its own findings and state in precise and concrete terms the finding made or view taken, the correctness of which is in issue and which has given rise to the question referred.
7. The only point raised by the question referred is whether in computing the assessee's income from agriculture, it was right to include the adhiars' share of the paddy grown on the lands and to grant the allowance admissible under Section 7(1) of the Act on the basis of such computation. The assessee's contention is that in describing the agricultural income chargeable to tax, the opening paragraph of Section 7 uses two expressions, viz., 'derived from land' and 'received in the previous year' and therefore unless an income, besides being derived from land, was also received by the assessee, it would not be liable to be included in his taxable income and no tax would be payable on it. The share of the paddy paid to the adhiars, it is said, may have been derived from the assessee's lands, but it was not received by him. Accordingly it is contended that in computing the agricultural income of the assessee, that share ought to have been excluded.
8. The full expressions used in the opening paragraph of Section 7 are 'agricultural income derived from land referred to in Sub-clause (b) of Clause (1) of Section 2' and 'received by him in the previous year'. The object of these expressions in Section 7 does not seem to be to emphasise that in order to be taxable, income from agriculture must both be derived from agricultural land and received by the assessee. The first expression merely specifies the income by reference to its description in Section 2(1)(b) and there by indicates that it is that income which is contemplated, while the second expression indicates that the income in view is the income of the previous year. Nevertheless, the contention that in order to be taxable, income derived from land by agriculture must be received by the assessee, is correct, because that is the clear import of Section 4 of the Act which defines 'total agricultural income' made taxable by Section 3. Under that definition, the total agricultural income of a person which is chargeable to tax under Section 3 is 'income derived from land' and 'received by Mm.' The assessee therefore says rightly that the 2250 inaunds of paddy taken by the adhiars cannot be included in his taxable income, unless it can be shown that he received it. But his further contention that he did not receive that paddy does not appear to be correct.
9. If the special plea based on the alleged incidents of cultivation by adhiars under the Cooch Behar Tenancy Act be excluded, as it must be, no room is left in this case for a contention that the assessee's adhiars were not his servants or labourers. Indeed, it was not contended that they were not servants or labourers, even if their status was the same as that of adhiars under the Bengal Tenancy Act. If they were the assessee's servants or labourers, the share of paddy paid to them was only wages for their labour and the payment was an application by the assessee of his income and not a diversion of the paddy by some overriding title before it could become income in his Hands. One pays his workmen with his own money and not with money belonging to the workmen themselves; and no mere workmen can say that the wages received by him come to him directly by virtue of his own independent right to the money and not by way of payment made to him by his employer. In law, therefore, the position with regard to the share of crops paid to an adhiar or bargadar or other labourer is that it is received by the owner of the lands as a part of the total yield and . then it is paid to the labourer as his remuneration and such is the position even when the labourer retains his share of the crops instead of physically handing it over in the first instance to the owner along with the latter's share and then receiving it back from him. In the present case, the adhiars' half-share of the 4500 maunds of paddy was thus also received by the assessee. It was therefore correct to include it in the taxable income of the assessee and then grant him an allowance to the extent of 50 per cent of the market value of the whole 4500 maunds. Whether or not the market value was correctly determined is, however, a different question.
10. I desire to make it clear, however, that this case is concerned with only the adhiars' share of the produce and it is only with regard to that share that the question of receipt has been raised-There is no difficulty in holding that that share is received by the owner of the lands. Other considerations may apply when a part or no part of the owner's share is in fact not received by him. With regard to such a case which is not involved in the present reference, I express no opinion.
11. The really controversial question in cases of this kind is not whether the share of the produce paid to the adhiar or bargadar is to be included in the gross income of the assessee, but what should be the method of determining the market value of the produce, Where the open market rate is applicable to the whole of the produce, no difficulty arises or injustice to the assessee is caused, because if the adhiar's or bargadar's share is first included in the assessee's income, its equivalent in money, or even a larger amount where the bargadar's share is less than half, is next deducted by way of granting an allowance. To take a hypothetical case of cultivation by adhiars, if the total yield is, say, 500 maunds and the 250 maunds payable and paid to the adhiars, are included in the income received by the assessee, one-half of the market value of 500 maunds, which will be the same as the market value of the 250 maunds of the adhiars' share, will next have to be deducted as the admissible allowance so that, in the end, the assessee will be taxed only on the market value of the remaining 250 maunds which represent his own share. Thus, where the same rate of market value is applicable to both the 250 maunds, the result of the initial addition and the subsequent subtraction will be even, because what will come in once will go out again. In the case of bargadars receiving less than a half share, say one-third, the assessee will even be in a position of advantage, because while only one-third of the produce 'will be added as his income to the two-thirds factually received by him, he will be entitled to an allowance of one-half of the market value of the whole produce.
12. A difficulty will, however, arise if the rate of market-value applicable to the adhiar's of bargadar's share be higher than that applicable to the assessee's own share. Under Rule 4 of the Rules framed under the Act, the market value of agricultural produce sold in the market is to be taken to be the price for which it is sold and the market value of produce not sold in the market is to be taken to be the average price at which such produce was sold in the locality during the previous year. I am leaving aside the case of produce of lands which are not ordinarily sold in the market. In the case of produce from lands cultivated through adhiars or bargadars, the assessee's share must be taken as sold or not sold in the market according as he sells it or does not, but the adhiar's or bargadar's share must always be taken as 'not sold in the market', because the assessee does not sell it, but pays it to the adhiar or bargadar. If the asses-see sells his share in the market but sells it voluntarily for less than the open market price, he has himself to thank if the adhiar's or hargadar's share, included in his income, is valued at the open market rate, but he is given an allowance of only half the market value of the total yield, calculated, as to the adhiar's or the bargadar's share at the full open market rate but, as to his own share, at the lower rate at which he sold. To take again an instance of cultivation by adhiars, if the total yield be 500 maunds and the open market rate Rs. 20/- per mauud, but the assessee sells his half share of 250 maunds at Rs. 15/- per maund, the market value of the produce raised from the land will be Rs. 5000 plus Rs. 3750 = Rs. 8750 and the allowance admissible to the assessee being half of Rs. 8750/-i.e. Rs. 4375, his taxable income will be an equivalent amount against his actual receipt of Rs. 3750/-. If, on the other hand, the assessee had sold his 250 maunds at the full open market rate, the market value of the whole produce would have been Rs. 5000/- plus Rs. 5000/- = Rs. 10,000/- and the allowance admissible being one-half of Rs. 10,000/-, i.e. Rs. 5000/- , the taxable income of the assessee would also have been Rs. 5000/- against his actual receipt of the same amount. If the assessee brings about the result following in the first of the above two cases by his own action, he can have no reason to complain, but if the result is forced on him by compelling him to sell his share of the paddy at a lower than the market rate, he is consigned to a position, the iniquity of which is obvious.
13. There can be no doubt that when the Bengal Agricultural Income-tax Act was enacted and rules under it framed, It was not anticipated that there might some day be a measure like the Food Grain Control Order and compulsory levies of foodgrains at a price much lower than the price prevailing in the contemporary open market. When the Food Grain Control Order was introduced, it might be expected that the Act and the rules framed under it would, in fairness, be amended, but they were not. The Court must therefore see, when the question is raised, whether even within the language of the Act and the Rules as they stand, means can be found for adjusting their provisions to the case of assessees whose agricultural produce was commandeered by the State and paid for at considerably less than the market rate. In the present case, that question was not raised. The assessee limited his objection to the inclusion of the adhiar's share of the paddy in the produce received by him, but did not contend that in determining the market value of the produce, the open market rate ought not to be applied to the adhiar's share. The Tribunal followed a method of valuation which, to say the least, was inconsistent. They treated both the adhiars' share of the paddy and the 250 maunds of the assessee's share which he had not sold or delivered during the accounting year as produce 'not sold in the market' and yet they applied to the former the open market rate of Rs. 20/- per maund but to the latter they applied the procurement rate of Rs. 7-15 per maund. In the case of produce of a kind which is ordinarily sold in the market but which was not so sold, the market value is, under Rule 4 (2)(a) 'the value calculated according to the average price at which such produce has been so sold in the locality during the previous year'. If, pertinent to the same assessment of the same assessee, there were two quantities of the same cropsy both 'not sold in the market', it is impossible to see how there could be two different rates of the average price during the same previous year, or how there could be any justification in Rule 4 (2)(a) for applying two different rates. It would seem that either the one or the other would apply to both. I am, however, not deciding the point, not, be speak of deciding which of the two rates would be properly applicable, since the question was not raised; But as the Tribunal say in the statement of the case that for the purposes of computation, the adhiars' share of the paddy was to be treated as having remained unsold in the hands of the assesses, 'thereby attracting the average market price in the locality which is enjoined by Rule 4 (2) (a)' and since the general language of the question referred, asking if 'the basis and the method of computation adopted by the Assistant Commissioner' was in accordance with the provisions of the Bengal Agricultural Income-tax Act, 1944, and Rule 4 framed thereunder' might be thought to cover this question as well, I find it necessary to point out that this question bristles with difficulties & is not being considered or decided and that we must not be understood to hold anything as regards the correctness of the Tribunal's application of the open market rate to the adhiars' share of the paddy while applying the procurement rate to a part of the assessee's own share. In dealing with references, the principle uniformly followed by the Court has been to limit its consideration to question raised before the Tribunal at the appellate stage and asked to be referred by the application for a reference. In the present case, the assessee did not, even by his application for a reference, raise any question as to the proper method of valuation in regard to the rates applicable. And therefore why the Tribunal added a reference to Rule 4 in the question framed is not clear.
14. The question referred to us asks whether 'the basis and the method of computation adopted by the Assistant Commissioner and confirmed by the Tribunal' are in accordance with the Act 'and Rule 4 framed thereunder'. Obviously, the question refers to a point in regard to which the Assistant Commissioner and the Tribunal were in agreement. They were in agreement only in regard to the inclusion of the adhiars' share of the paddy in the income of the assessee, but as regards the rate applicable in computing the market value of the whole produce received from the land, one-half of which was to be deducted as an allowance for the cost of production, they were not in agreement. The question of the rate applicable in computing the market value of the produce is therefore not covered by the question. Nor could it properly be included, because the assessee never raised any question as to the rate, at least as to the rate applicable to the adhiars' share and no controversy as to that rate having been decided by the Tribunal, no question as to it arose out of the appellate order. Indeed, as J have already pointed out, the assessee did not, by his application for a reference, ask for a reference of any question of rate. If it be said that as regards the rate applicable to the adhiars' share of the paddy, the Assistant Commissioner and the Tribunal were in agreement and therefore the question of that rate is included in the question referred, the short answer is that no point as to that rate was ever raised by the assessee, either in the appeal or in the application for a reference and therefore there was no question before the Tribunal as to that rate at all and there was none to be referred. We have therefore treated the question referred as limited to the question of the inclusion of the adhiars' share in the assessee's income.
15. For the reasons given above, the answer to the question referred will be as follows :--
Yes, so far as the quantitative computation of the assessee's produce income by the inclusion therein of the adhiar's share and the grant to him of the allowance on the basis of such computation were concerned, no opinion being expressed on the correctness of the determination of the market-value of the produce.
16. There will be no order for costs.
17. I agree.