TMI Blog1953 (3) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt:- Whether in the circumstances of the case, the sum of ₹ 12,046 being fees collected from owners of cattle for allowing them to graze on forest lands covered by jungle and grass (admittedly of spontaneous growth) is exempt as agricultural income within the meaning of Section 2 of the Income-tax Act? The statement of the case is rather brief and the only facts that appear therefrom are mentioned in the question itself. The appellate order of the Tribunal, dealing with this point, is quoted in full in the statement of the case and that too does not give the facts in detail. All that we can gather from the appellate order and the statement of the case is that the assessee owns a big estate, part of which is forest land, that in the forest land there is grass of spontaneous growth, that owners of cattle are allowed to graze on payment of a fee and that this fee which is known as grazing dues comes to ₹ 12,046. On these facts we are asked to decide the question, whether these grazing dues are agricultural income or not. Section 2, sub-section (1), of the Indian Income-tax Act defines agricultural income as follows:- (a) any rent or revenue derived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of Section 2(1)(a) of the Income-tax Act, and as such exempt from income-tax under Section 4(3)(viii) of the Act? (See Raja Mustafa Ali Khan v. Commissioner of Income-tax, U.P. and C.P. [1945] 13 I.T.R. 98). The Oudh Chief Court having decided against the assessee, the matter was taken up to the Judicial Committee which held that the income was not agricultural income. In the course of the judgment their Lordships made the following observations, dealing with the question as to the meaning to be ascribed to the word agriculture :- (1) that in their opinion no assistance is to be got from the meaning ascribed to the word 'agriculture' in other statutes, and (2) that, though it must always be difficult to draw the line, yet, unless there is some measure of cultivation of the land, some expenditure of skill and labour upon it, it cannot be said to be used for agricultural purposes within the meaning of the Income-tax Act. The income in that case was derived from the sale of trees described as forest trees growing on land naturally and the case had throughout proceeded upon the footing that there was nothing to show that the assessee was carrying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not called upon to pronounce an opinion. Trees, unless they are cultivated, if we may use that phrase, or grown, would not be normally deemed to be a part of agricultural operations of an agriculturist. The sale of timber which entitles the purchaser to cut the trees and remove the wood and sell it is not a part of agricultural operations. It is possible to conceive of a case where, instead of growing crops, a person undertakes to spend money and labour in growing trees on a plot of land assessed to land-revenue or local rates. This might be an agricultural operation. We, however, do not express any opinion on the point, as the point does not arise in this case and is not a question on which we are called upon to give an answer, but there can be no doubt that trees growing spontaneously on forest land cannot be deemed to be a part of agricultural operations. Rearing of cattle, however, is intimately connected with agriculture and can be deemed to be a part thereof. If land is, therefore, used for pasturage, it cannot be said that it is so divorced from agricultural operations that the income derived therefrom cannot be said to be agricultural income. No doubt the assessee derivi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a dairy farm in a rural area would be such land even though nothing is grown on it and only buildings are there. So also would be land leased out to a person who conducts agricultural operations on a large scale, for the housing and tethering of his agricultural livestock. A distinction has to be drawn between the land and the purpose for which the land is used. The land need not be agricultural land in the sense that it must grow a crop. It can be any land which is used for an agricultural purpose, and the income can be any rent or revenue derived from such land. When the agricultural purpose is the growing of a crop then there must be some element of skill and labour expended upon it, but when the purpose is the management of livestock we are not concerned with the product of the soil. The human agency element must still be there. There must be skill and labour in the management of the stock but not upon the land. The land in such a case is incidental to the main purpose. If we may say so with respect, we are in full agreement with the observations quoted above. Reliance has been placed on behalf of the Commissioner of Income- tax on a decision by this Bench in Pratap S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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