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TMI Blog1976 (8) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... iven in section 2(e) of the Act, and, therefore, exempt from wealth-tax. Section 2(e) says: "2(e) 'assets' includes. property of every description, movable or immovable, but does not include-- (i) agricultural land and growing crops, grass or standing trees on such land..." The word "agricultural land" occurs in entries 86, 87 and 88 of List I to the 7th Schedule of our Constitution relating to matters on which Parliament may legislate. Entry 86 here says: "Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies." Entries 87 and 88 deal with estate duty and duties of succession to property and each of them excludes agricultural land from property on which taxes may be levied by Parliament. Entry 18 of List II giving subjects of exclusively State legislation says: "Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents, transfer and alienation of agricultural land; land improvement and agricultural loans; colonization." It is thus clear that "agricultural land" is only a species of land. The main question before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations are wanting the subsequent operations do not acquire the characteristic of agricultural operations." In Raja Benoy Kumar Sahas Roy's case the question before this court was whether income from forest lands derived from sal and piyasal trees "not grown by human skill and labour" could constitute agricultural income. The test applied there was whether there was some integrated activity which could be described as agricultural operation yielding income. It was pointed out that, although a mere wild or spontaneous growth of trees, not involving the employment of any human labour or skill for raising them, could not be agricultural income, yet, when there was a forest more than 150 years old, which had been carefully nursed and attended to by its owners, the income would be agricultural. It is true that this case is not a direct authority upon what is "agricultural land". Nevertheless, it goes a long way in helping us to decide what could be agricultural land. We think that this must be land which could be said to be either actually used or ordinarily used or meant to be used for agricultural purposes. In other words, "agricultural land" must have a connection with an agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dictionary meaning which, in the absence of some overriding or special reasons to justify a departure, must prevail. Moreover, it was held there that the dictionary meanings of the word "agricultural" were wider than what was meant by "agricultural income" as that term was used in the Income-tax Act. Even if we could give a wider connotation to the term "agricultural" than the one it carries with it in the Income-tax Act, we cannot dispense with credible evidence of at least appropriation or setting apart of the land for a purpose which could be regarded as agricultural and for which the land under consideration could be reasonably used without an alteration of its character. This, we think, is the minimal test of "agricultural land" which should be applied in such cases. In stating the facts of the case with regard to the Begumpet property, which, according to a rather surprising agreement between the parties, was to be used for reaching an inference applicable to all other lands in the case, the High Court said: "The property at Begumpet was known as 'Begumpet Palace, Hyderabad'. The buildings in this property were valued at Rs. 8,81,336 while the vacant land comprising an ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Andhra Pradesh High Court had said in Smt. Manyam Meenakshamma's case: "We are inclined to agree with the observations of Hegde and Ahmed Ali Khan JJ. in Sri Krishna Rao L. Balekai v. Third Wealth-tax Officer that the present characteristics and not the potentialities of a land are the proper criterion. If a land is ordinarily used for purposes of agriculture or for purposes subservient to or allied to agriculture, it would be agricultural land. If it is not so used, it would not be agricultural land. The question how a land is ordinarily used would be one of fact depending on the evidence in each case. If, for instance, an agricultural land, as we have interpreted above, is left fallow in a particular year owing to adverse seasonal conditions or to some other special reason, it would not cease to be agricultural land." Apparently, the conflict between the views contained in Sarojini Devi's case and in Smt. Manyam Meenakshamma's case had led to a reference of the case to a larger Bench. The Full Bench of the Andhra Pradesh High Court, after discussing a number of cases of various High Courts, preferred the Madras High Court view, principally on two grounds: firstly, because a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ender it unfit for immediate cultivation. The other relevant fact is that the land has been admittedly assessed to land revenue as "agricultural land" under section 50 of the Hyderabad Land Revenue Act. These factors, in our opinion, strongly indicate that the land in question is agricultural land." We think that it is not correct to give as wide a meaning as possible to terms used in a statute simply because the statute does not define an expression. The correct rule is that we have to endeavour to find out the exact sense in which the words have been used in a particular context. We are entitled to look at the statute as a whole and give an interpretation in consonance with the purposes of the statute and what logically follows from the terms used. We are to avoid absurd results. If we were to give the widest possible connotation to the words "agricultural land", as the Full Bench of the Andhra Pradesh High Court seemed inclined to give to the term "agricultural land", we would reach the conclusion that practically, all land, even that covered by buildings, is "agricultural land" inasmuch as its potential or possible use could be agricultural. The object of the Wealth-tax Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gar tank; secondly, that this land had two wells in it; thirdly, that it was capable of being used for agricultural purposes; fourthly, that it had not been actually put to any use which could change the character of land by making it unfit for immediate cultivation; and, fifthly, that it was classified and assessed to land revenue as "agricultural land" under the provisions of the Andhra Pradesh Land Revenue Act 8 of 1317 Fasli perhaps on the assumption that it could be used for agriculture. We may observe that the first four indicia set out above are based on the absence of any user for non-agricultural purposes. Hence, they are inconclusive. The last feature does seem to provide some evidence of the character of the land from the point of view of its purpose. Section 50 of the Hyderabad Land Revenue Act (No. VIII of 1317F) (now called the Andhra Pradesh Land Revenue Act) lays down: "50. Land revenue shall be assessed according to the various modes of use: (a) Agricultural use. (b) In addition to agricultural use any other use from which profit or advantage is derived. When rate is assessed on any land for any one of the aforesaid purposes and the land is appropriated f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, to be remembered that such entries could raise only a rebuttable presumption. It could, therefore, be contended that some evidence should have been led before the taxing authorities of the purpose or intended user of the land under consideration before the presumption could be rebutted. If the "prima facie" evidence of the entries was enough for the assessee to discharge his burden to establish an exemption, as it seemed to be, evidence to rebut it should have been led on behalf of the department. We think that this aspect of the question was not examined by the Full Bench from a correct angle. Although it seems to have based its conclusion primarily on the "prima facie" evidence provided by the entries under section 50 of the Andhra Pradesh Land Revenue Act, it had also used other indicia which were really not very helpful. They had a bearing on potentialities for agricultural user. The Full Bench had, however, not recorded a finding that the conclusion reached by the taxing authorities, that the land was never even intended to be used for an agricultural purpose, rested on no evidence at all. It had not given its reasons for rejecting this finding of the Tribunal. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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