Computation of net income

(1) For the purposes of preparing compensation-Assessment-roll the net income from an estate shall be computed by deducting from the gross assets of such estate the following, namely:-(a) any sum which was payable as land revenue or rent including cesses to the State Government or to the immediately superior Intermediary, as the case may be, in respect of the estate for previous agricultural year: Provided that where rent of a holding comprised in such estate has been commuted into cash rent and there has been no revaluation of the cess payable in respect of that estate, the cess payable under this clause shall be determined on the basis of the commuted rent; (b) any sum which was payable in respect of such estate as agricultural income-tax in respect of any agricultural income derived from such estate for the previous agricultural years: (c) any sum which was payable by the Intermediary as income-tax in respect of any income other than royalties from mines derived from such estate for the previous agricultural years: Provided that the income-tax payable under this clause shall be determined in accordance with the rate of assessment which would have been applicable if the intermediary had no income other than the income derived from such estate; (d) any sum which was payable as chaukidari-tax or municipal-tax in respect of any building used primarily as office or kutchery for the management of such estate or as rest houses for estate servants on duty or golas used primarily for storing rent in kind; (e) cost of management of such estate at there following rates, namely:- Amount of gross asset Rate (i) Where the gross asset does not exceed Rs. 500. Nil (ii) Where the gross asset exceeds Rs. 500 but does not exceed Rs. 2,000. 5 per centum of such gross asset (iii) Where the gross asset exceeds Rs. 2,000 but does not exceed Rs. 5,000. 7 ½ per centum of such gross asset (iv) Where the gross asset exceeds Rs. 5,000 but does not exceed Rs. 10,000 10 per centum of such gross asset (v) Where the gross asset exceeds Rs.10,000 but does not exceed Rs. 15,000. 12 ½ per centum of such gross asset (vi)Where the gross asset exceeds Rs.15,000 Not less than 15 and not more than 20 per centum of such gross. Provided that the deductions on account of the cost of the management referred to clause (e) shall not in any case have the effect of reducing the net asset of the Intermediary specified in any entry in sub-clauses (ii) to (vi) of the said clause to an amount below the net asset of the Intermediary specified in the entry mentioned in sub-clauses (i) to (v) respectively, of the said clause. Explanation - For the purposes of this section the term “net asset” means the gross asset minus the deductions on account of the cost of management; Illustration - An Intermediary has a gross asset of Rs. 2,000. After deducting the cost of management at the rate of 5 per centum his net asset comes to Rs.1,900. Another Intermediary has a gross asset of Rs.2,010. After deducting the cost of management at the rate of 7 ½ per centum his net asset comes to Rs. 1,860 but under the terms of the proviso, his net asset shall not be less than Rs. 1,900; (f) (g) any other tax or legal imposition payable in respect of such estate not expressly mentioned in clauses (a) to (f) or the value, to be commuted in the prescribed manner, of any services or obligations of any other form to be rendered or discharged as condition precedent to his enjoyment of such estate; (h) an amount which in the opinion of the Compensation Officer is equivalent to the approximate loss caused to the annual gross income of the estate on account of damage, destruction or deterioration in value of forest or other properties brought about after the 1st day of January, 1946 by any act of omission or commission of the Intermediary. (2) That State Government may make rules providing for the manner of calculation of sums under the different clauses of sub-section (1), when the estates vested in the State Government under section 3 or section 3-A is a share in an estate or when the previous agricultural year does not exactly coincide with the year according to which any sum refered to in any of the said clauses was payable.