TMI Blog1929 (11) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... is contended that the (manufacture of the fibre from these leaves constitutes manufacturing process as opposed to an agricultural process be profits from which are not exempt as agricultural income under section 4 sub-section. 3(viii). The aloe plant from which the assessee produces the fibre is one variety of a class of plants indigeneous to India and growing freely in the wild state,. The principal use of these aloe plants is to provide hedges but hitherto they have not been the subject of regular cultivation. It has long been known that the leaves of some varieties could be so treated as to yield a fibre suitable for the manufacture-of rope and matting and villagers have occasionally been found to' take the leaves of the wild pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the profits resulting from the growing of sisal and the manufacture from it of the fibre is taxable, or whether, on the other hand, the whole of the profits are exempt as being purely agricultural income. Now it is perfectly clear from the wording of the section that an agricultural process does not necessarily stop short at the removal of the plant from the soil. In the case of, for example, cereals plants they must be threshed and winnowed in order to produce the grain and the process of threshing and winnowing is one ordinarily employed by the cultivator to render the produce-fit to be taken to market. It is further to be noted that in order to test whether the process employed by the assessee is an agricultural process it should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment does not provide a standard of comparison for the process employed by the assessee. The word market. In the section implies a real center of economic exchange and the purchase by jails is merely an artificial condition having no relation to a market for agricultural produce. The Department rely upon the decision of the Calcutta High Court in the case of Killing Valley Ten Company Ltd., v Secretary of State for India 1 ITC 54. That case was concerned with the state of affairs in connection with the- manufacture of tea. The assessee employed a process of manufacture applied to the leaf which involved the use of costly machinery and was of a complicated nature but the Court was able to compare this process with a process which bad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable, then process ordinarily employed by the cultivator of the aloe plant in order to render his produce fit to hi taken to market is that in fact employed by the assessee and, the whole of the profits derived by him from the manufacture o sisal fibre is agricultural income and as such-is exempt from taxation. It may be that in the future the economic conditions may change. If the growth of the aloe leaf should become established as an agricultural industry by itself, and if the manufacturers of sisal fibre cease to cultivate, the plant themselves and should purchase the leaves in an open market, then such circumstances may possible require re-consideration in the light of the income-tax law; but the circumstances which at present prevai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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