TMI Blog1959 (11) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural income for tendu leaves grown and sold in view of the Calcutta High Court decision in this case in which it was held that to the extent to which the profit from tendu leaves can be ascribed to the process of pruning the tendu leaves, it was an agricultural income within the meaning of section 2(1) of the Indian Income-tax Act. Since it is not definite to what extent pruning has been resorted to, an estimated amount equivalent to 50 per cent. of the total profit on account of tendu leaves is allowed as agricultural income. So far as the assessment of that particular year is concerned there was no appeal. In order to understand what all this is about, it is necessary to refer back to the decision in In re Moolji Sicka and Co. [1939] 7 ITR 493. This case related to the petitioner firm, and also related to the same question in respect of lands in Madhya Pradesh, which were utilised for the growing, collecting and selling of tendu leaves. It was a reference under section 66(2) of the Indian Income-tax Act, as it then stood. It appears that the court called upon the Commissioner to have a supplementary statement of the case prepared, so as to answer certain question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the operation carried out by the asses-see in connection with this forest was of an agricultural nature or not. The decision of Derbyshire, C. J., in In re Moolji Sicka and Co's case (supra) came up for consideration and was dissented from. It was held by the Supreme Court that when we are considering as to whether land was used for agricultural purposes, or agricultural operations were performed on it, we must distinguish the case where plants were grown on the soil by the assessee or where it was a case of merely tending or improving plants which were already there or of spontaneous growth. It was held that where it was a case of a basic operation, then it would amount to agriculture, but where there was no basic operation, then the taking of various steps, merely to tend or improve existing plants or plants of spontaneous growth, including the operation of pruning, does not amount to an operation that can be called agricultural. Therefore, such operations do not give rise to income which could be said to be agricultural and as such subject to exemption. As I have said, In re Moolji Sicka and Co's case (supra)was expressly dissented from. In or about February 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the assessment year 1936-37. 'Assessee has given an evasive reply stating' We are not in possession of papers of 1935-36 and 1936-37 and consequently not in a position to say either way. But since 1950-51 we have records to show that we have been carrying on operations stated in paragraph 1 which are purely agricultural.' I have already observed that there is absolutely no evidence to show that the firm actually performed any operation on the land which could bring the income therefrom within the definition of agricultural income. Actually the assessee did not plant any trees. A mere recital in the lease deed is of no significance and does not prove that the assessee actually planted trees and performed agricultural operations. The Income-tax Officer points out that in a statement filed there were expenses shown for tilling, watering and planting, but there was no evidence given of the plantings and so far as tilling and watering was concerned it could relate to operations which were not basic operations. The result was that the amount which had been exempted in the earlier assessment was held to be taxable. It is against this reassessment order that this appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the assessment in 1934 which was the subject matter of the case of In re Moolji Sicka and Co. [1939] 7 ITR 493 is concerned, it was found as a fact that the tendu plants were of spontaneous growth. Therefore, if similar facts existed in respect of the assessment of 1953-54, then indeed, under the principle as declared by the Supreme Court, the operation would be non-agricultural, because the pruning would be in respect of plants of spontaneous growth and would therefore not constitute a basic operation. Mr. Mitter however argues that the old leases had long ago expired and new leases had taken their place. Under the new leases there is prima facie a right to grow plants, and he says that in fact the income was derived from such operation. He says that the Income-tax Officer had no facts in his possession which could have induced him to believe, or give him reason to believe, that the facts continued to be the same, and if he did not believe in that basic fact then he had no reason to believe that there was any escape of assessment. Consequently he says that this reopening of the assessment was outside the purview of the power granted under section 34(1)(b) and in spite of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the facts that constituted the foundation of that decision. Since the law has been changed, and if it was the contention of the assessee that the facts had been changed then the onus was upon it to prove the change of facts. In my opinion, the Income-tax Officer would have, under the circumstances, reason to believe that part of the income had escaped assessment. It will be recollected, and in this respect I cannot go beyond the assessment order, that the assessee did not take advantage of the proceedings and did not adduce any evidence in respect of its case, or at least the evidence adduced is not sufficient. Mr. Mitter argued that evidence had been adduced and should have been found satisfactory. However, I am not a court of appeal upon such points, and I cannot go behind the finding of the Income-tax Officer in respect thereof. If the case of the assessee is that such findings are incorrect, he should appeal in the usual manner. The result is that I find no ground for interference in this case and this application must fail. The rule is discharged. Interim order is vacated. No order as to costs. The operation of this order will be stayed for six weeks from date. But any f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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