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2019 (5) TMI 843 - AT - Income TaxReceipts from sale of spontaneous growth of trees - Capital receipt or income from other sources - non taxability of receipt - HELD THAT:- As relying on AMBAT ECHUKUTTY MENON [1979 (9) TMI 2 - SUPREME COURT] this issue was settled by the above judgment wherein it was held that receipts from sale of spontaneous growth of trees is a capital receipt not liable to tax. Even section 55(2)(a) has no relevance in the case of spontaneous growth of trees. See M/S. NATRAJ VERSUS DCIT, CIR. 10 AHMEDABAD. [2013 (1) TMI 970 - ITAT AHMEDABAD] The provisions of section 55(2)(a) cannot be applied to spontaneous growth of trees and is to be applied only to goodwill, trade mark, brand name, right to manufacture, produce or process any article or thing or right to carry on any business, tenancy rights, stage carriage permits or loom hours etc. In the case of State of Kerala vs. Karimtharuvi Tea Estates Ltd. [1965 (12) TMI 36 - SUPREME COURT] held that High Court had confirmed that gravelia trees were grown and maintained for the sole purpose of providing shade to the tea bushes in the tea estates of the assessee. That such shade is essential for the proper cultivation of tea cannot be disputed; and hence, we consider it to be a part of the capital asset of the company and tea bushes themselves are the equipment of tea factories. Some of the gravelia trees became old and useless with the expiry of time and naturally to be cut for sale. In view of the above order of the Tribunal and the judgments of the Supreme Court, we are inclined to dismiss the grounds of appeals of the Revenue.
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