TMI Blog1965 (1) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... of water supply for the two years respectively aiid Hs. 33,702 and ₹ 31,948 being the value of roads and bridges respectively for the two years. The assessee also claimed that a part of the tea estate land in which the forest grows spontaneously arid which was not used for growing tea crops was agricultural land within the meaning of Section 2(e)(i) of the Wealth Tax Act and, as such, the value of such land cannot be included in the valuation of the assessee's assets. The Wealth Tax Officer estimated the value of the non-agricultural land at ₹ 50,000 and included the same in computing the net wealth of the assessee on the valuation dates. Further the assessee had made provisions for its taxation liability in its accounts on the respective valuation dates, the relevant amounts being ₹ 15,02,078, ₹ 18,07,027 and ₹ 30,65,094 for 1957-58,. 1958-59 and 1959-60 respectively. The assessee claimed the amounts as a deduction in computing its net wealth. The-aforesaid three claims of the assessee under three heads were disallowed by the Wealth Tax Officer and the Appellate Assistant Commissioner. On further appeal, the Tribunal also did not accept the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anks and pipelines and roads and bridges and that, unless they are held to be essential components or elements of 'agricultural land', the assessee cannot get the advantage of exemption under Section 2(e)(i). 4. We may at this stage discuss relevant provisions of the Wealth Tax Act 1957. Section 3 is the charging section whereby there shall be charged for every financial year commencing on and from the 1st of April 1957, the tax, known as wealth tax, in respect of the net wealth on the corresponding valuation date of every individual, Hindu Undivided Family and Company at the rate or rates specified in the schedule. The net wealth has been defined in Section 2(m) as the amount by which the aggregate values computed in accordance with the provisions of this Act of all the assets wherever located belonging to the assessee on the valuation date, including assets required to be included in its net wealth as on that date under this Act, is in excess of the aggregate value of all the debts owed by the assessee on the valuation date other than- (i) debts which under Section 6 are not to be taken into account; and (ii) debts which are secured on or which have been incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ali Sastri, J. in T. Sarojini Devi v. T. Sri Kristna has opined: In such context it seems to us that the expression 'agricultural land' must receive the widest meaning for it would be somewhat grotesque to suppose that Parliament intended that lands devoted to the production of one kind of crop should devolve according to laws passed by Provincial Legislatures, while those used for growing other kind should pass according to laws made by the Central Legislature, at that 'the circumstances in which the cultivation is carried on' (per Raleigh J. in Chandrasekara Bharati v. Duraiswamy Naidu, ILR 54 Mad 900: (AIR 1931 Mad 659)) should determine the law which governs the devolution of the land. Nor could it have been intended that succession to such lands should depend on the degree of tillage or preparation of the soil or of the skill and labour expended in rearing and maintaining the plants. We are of opinion that for the purpose of the relevant entries in Lists 2 arid 3 of Schedule 7, the expression 'agricultural land' must be taken to include lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Phrases' judicially defined in describing 'agricultural holding' has quoted Alness, Lord Justice Cleark from his judgment in kemp v. Ballachulish Estate Co. Ltd., 1933 SC 478 at p. 488: The phrase is not a technical term or a term of art. In my judgment the words are used in their ordinary significance as meaning land which is used for agricultural purposes. Thus, the term 'agriculture may be understood in a narrow or wide sense. A meaning; attached to the said term in one statute 'does not necessarily throw any light on the meaning that is to be given to the same term in another statute. 'Agriculture may be restricted to only village or cultivation of a land or it may include all activities including horticulture, forestry, husbandry, dairying, butter and cheese making, etc. In view of the fact that there is no decision on the point, we are of opinion that we should restrict ourselves to the ordinary meaning of the term 'agricultural land' and not get lost in the woods to find out the tree. As stated earlier 'agricultural land' means pertaining to or connected with agriculture. In order to understand which lands pertain to or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which have some utility either for consumption or for trade and commerce, it would be seen that the term 'agriculture' receives a wider interpretation both in regard to its operations as well as results of the same. Nevertheless there is present all throughout the basic idea that there must be at the bottom of it cultivation of land in the sense of tilling of the laud, sowing of the seeds, planting and similar work done on the land itself. This basic conception is the essential sine qua non of any operation performed on the land constituting agricultural operation. If the basic operations are there, the rest of the operations found themselves upon the same. But if these basic operations are wanting, the subsequent operations do not acquire the characteristic of agricultural operations. 5. It is true that this case has dwelt on the meaning of the terms 'agriculture', and 'agricultural operations' in the context of the Indian Income-tax Act 1922 for the purpose of and with the primary object of finding out the meaning of the term 'agricultural income' under Section 2(1) of the Act, but we see no reason why the principles formulated in that c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral laud' is essentially connected with or is an integral part of primary or basic agricultural operations. To say that any asset which is useful or beneficial to the agricultural operation should be treated as agricultural land or to conclude that any land which is capable of being used as an agricultural land would be too wide an extension or the term 'agricultural land' not warranted by the scope and language of the Wealth Tax Act. In all cases where land not under agricultural operation is claimed as agricultural land within the meaning of Section 2(e)(i), there should be a clear finding that the land in question is vitally connected with the basic agricultural operations. 6. Applying the aforesaid principles to the facts of the instant case, in our opinion, agricultural land includes water tank and roads as they comprise not only land, but also are necessary ingredients of and vitally connected with the assessee's tea garden operations. For the same reason the bridges and the water pipes cannot be called 'agricultural land' unless there is a clear finding after an enquiry to the effect that the agricultural activity in the particular garden is not fe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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