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TMI Blog1965 (7) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... Act (XXVI of 1948). The Wealth-tax Officer included the balance of Rs. 71,279 of the compensation amount payable to the assessee in her total wealth for the purpose of the assessment. As regards the buildings, it is relevant only to mention that a house property at Yanam was valued by the assessee at Rs. 5,000 but the Wealth-tax Officer fixed it as Rs. 50,000. The assessee appealed to the Appellate Assistant Commissioner contending that the forest was not worth even Rs. 40,000 because the acquisition of the forest by the Government was under consideration. With regard to the compensation to be received from the Government, she contended that it was not an ascertained or definite amount but depended on the survey and ryotwari settlement. In respect of the house property at Yanam, she objected that its valuation at Rs. 50,000 was excessive. The Appellate Assistant Commissioner negatived the first two contentions of the assessee but reduced the valuation of the house property at Yanam from Rs. 50,000 to Rs. 40,000. The assessee took the matter on further appeal to the Income-tax Appellate Tribunal. Besides the points urged before the Appellate Assistant Commissioner, she contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to be received by the assessee only for a period of three years and, therefore, it constituted an interest in property, which is exempted by clause (v) of section 2(e) of the Act. But the Tribunal has observed in its order dated January 1, 1962, that the assessee was disputing the action of the Government and that the matter was pending decision in the High Court. In its statement of the case, the view taken by the Tribunal is that no issue arose out of the action of the Government and that the market value determined by it is a question of fact. No materials have been placed before us on the merits of the submission founded on section 2(e), clause (v) of the Act. We shall, therefore, confine ourselves to the question as framed by the Tribunal. The answer to this question turns on the construction of section 2(e)(i) of the Act, which is in the following terms : " (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;" Sri I. Vishnu Rao's contention is that the forest lands are capable of being used for agricultural purposes and, therefore, constitute agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terise them as agricultural operations. In order to invest them with the character of agricultural operations, these subsequent operations must necessarily be in conjunction with and a continuation of the basic operations which are the effective cause of the products being raised from the land ... In considering the connotation of the term ' agriculture' we have so far thought of cultivation of land in the wider sense as comprising within its scope the basic as well as the subsequent operations described above, regardless of the nature of the products raised on the land. These products may be grain or vegetables or fruits which are necessary for the sustenance of human beings including plantations and groves, or grass or pasture for consumption of beasts or articles of luxury such as betel, coffee, tea, spices, tobacco, etc., or commercial crops like cotton, flax, jute, hemp, indigo, etc. All these are products raised from the land and the term 'agriculture' cannot be confined merely to the production of grain and food products for human beings and beasts as was sought to be done by Bhashyam Ayyangar J. in Murugesa Chetty v. Chinnathambi Goundan or Sadasiva Ayyar J. in Raja of Ven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Devi v.Sri Krishna. In Megh Raj v. Allah Rakhia, after referring to the conflict of authorities as to the connotation of " agriculture ", Varadachariar J. said : " It may on a proper occasion be necessary to consider whether for the purposes of the relevant Entries in Lists 2 and 3, Constitution Act, it will not be right to take into account the general character of the land (as agricultural land) and not the use to which it may be put at a particular point of time. It is difficult to impute to Parliament the intention that a piece of land should, so long as it is used to produce certain things, be governed by and descend according to laws framed under List 2, but that when the same parcel of land is used to produce something else (as often happens in this country), it should be governed by and descend according to laws framed under List 3." Similarly, in Sarojini Devi v. Sri Krishna Anjaneya Subramanyam Patanjali Sastri J. stated : ".......... 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 these used for growing another kind shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention as to the forest lands in question being agricultural lands was put forward for the first time during the appeal to the Tribunal. This may not be correct because, as pointed out by Sri I. Vishnu Rao, even in her return dated May 19, 1958, the assessee stated referring to the forest " I claim it non-taxable as it is agricultural in nature ". In its order of January 1, 1962, the Tribunal has stated that " admittedly no agricultural operations are being performed " on the forest lands. Sri I. Vishnu Rao denies that the assessee made any such admission. Be that as it may, we find nothing on the record to suggest that the forest lands were being ordinarily used either for the purposes of agriculture or for purposes subservient to or allied to agriculture on the valuation date. It follows that our answer to the first question must be in the negative. Turning to the second question, it has to be noticed at the outset that in her return dated May 19, 1958, the assessee herself showed a sum of Rs. 71,279 as being half the compensation amount due to her by the Government for the villages taken over. The position of Sri I. Vishnu Rao is that this figure was based on the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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