AIR 1957 SUPREME COURT 729 ::1957 32 ITR 169 ::1957 SCJ 646 ::ILR 1957 9 Assam 265

Supreme Court Of India

24th April 1957.

Hon'ble Judge(s): N. H. Bhagwati, T. L. Venkatarama Ayyar, J. L. Kapur , JJJ

Assam Agricultural Income-Tax Act (9 of 1939) , S.2(a)(i)— Agricultural Income - Salami paid by tenant to landlord is neither rent, nor revenue but is capital payment. A.I.R. 1953 Assam 47, Reversed. Income-Tax Act (11 of 1922) , S.2(1)— Words and Phrases Salami. The payments by way of salami are made by the prospective lessees anterior to the constitution of the relationship of landlord and tenant as the price for the lessor agreeing to the parting of his rights in an agricultural holding in favour of the proposed lessee. Thus, 'Salami' is a payment by the tenant as a present or as price for parting by the landlord with his rights under the lease of a holding. It is a lump sum payment as consideration for what the landlord transfers to the tenant. When a tenant pays salami he does so in order to get in return an estate in the land owned by the zamindar. Salami is therefore not rent and it could not be called revenue within the meaning of the word used in the definition of agricultural income under S. 2 (1) (a) of the Act because it is a payment to the landlord by the tenant as a consideration for the transfer of a right in zamindari lands owned by this landlord. It has, therefore, all the characteristics of a capital payment and is not revenue.Case law Reviewed.(Para 24 25 26) ....