TMI Blog1970 (5) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... l Income-tax Act, 1950, hereinafter called the "Act", in respect of the assessment years 1963-64 and 1964-65. For the assessment year 1963-64 the assessee filed a return showing a net agricultural income of Rs. 12,558.76. When the matter came up for hearing before the Agricultural Income-tax Officer another statement showing an amount of Rs. 43,250.00 as income from teak trees was filed. The Agricultural Income-tax Officer disallowed certain expenses and assessed the income for the year 1963-64 at Rs. 62,021.00. For the assessment year 1964-65 a return was filed declaring a net agricultural income of Rs. 25,733.63. No income was shown from the sale of teak trees. The Agricultural Income-tax Officer found that teak trees had been sold for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee that the amounts received by sale of the teak trees constituted capital and were not agricultural income. Certain amounts were, however, allowed as deductions by way of expenses for the assessment year 1963-64. The principal point that has to be determined is whether the sale proceeds of the teak trees constituted capital or revenue. It appears to have been common ground before the High Court that the assessee planted the teak trees some time in the year 1946-47. The form of the question itself showed that the trees were cut and completely removed from the land together with their roots for the purpose of planting rubber. There was no question of any further regeneration or growth of the trees which had been cut and removed. In other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th some sort of regularity or expected regularity from definite sources. The source is not necessarily one which is expected to be continuously productive, but it must be one whose object is the production of a definite return excluding anything in the nature of a mere windfall. Once the teak trees were removed together with their roots and there was no prospect of regeneration or of any production of a return therefrom, it could well be said that the source ceased to be one which could produce any income. The Bombay High Court in Commissioner of Income-tax v. N. T. Patwardhan, said that from the point of view of a person engaging himself in the business of sale of trees the capital structure would be not only the land on which the trees st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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