TMI Blog1952 (5) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... n and the assessee was deriving regular income from the forest and spending money to increase the profit. It was in view of these admissions that Shri Pathak had to concede that the answer to this question must be in the affirmative, i.e., that the net receipts on the sale of forest trees were the assessee's income liable to income-tax and were not merely capital converted into cash. Shri Pathak has, however, urged that this income must be treated as agricultural income within the meaning of Section 2(1)(a) of the Indian Income-tax Act and as such it is exempt from income-tax. As the question has been framed, the answer can only be in favour of the department. The assessee had prayed that the question be amended as follows :- Whether the income from the sale of forest trees originally of spontaneous growth for the regeneration and preservation of which human labour and skill were used, growing on land, which is assessed to land revenue, is 'agricultural income' within the meaning 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 ? When this application came up before the Tribunal, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the rent or revenue of any such land, or occupied by the cultivator, or the receiver of the rent-in-kind, of any land with respect to which, or the produce of which, any operation mentioned in sub-clauses (ii) and (iii) of clause ( b) is carried on : Provided that the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator, or the receiver of the rent-in-kind by reason of, his connection with the land, requires as a dwelling house, or as a storehouse, or other out-building . It is not disputed that the land in this case is assessed to land revenue. The only question for decision is whether, in this case, the income can be said to be derived from land used for agricultural purposes by agriculture within the meaning of these words in Section 2(1)(b)( i) of the Indian Income-tax Act. It has not been and could not be contended that this income can be treated as agricultural income within any other clause of Section 2(1) of the Act. In the Statement of the Case, the Tribunal has mentioned that it was conceded before the Bench that there was no evidence on the record of the assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book, we may look at that order also. However, even if that order is taken into consideration, it does not show that any actual watering of the trees was done by the assessee and it would appear that, at best, all that was done in expending skill and labour for the regeneration and preservation of the trees was pruning and weeding besides protecting of the trees. This process by itself is not enough to constitute agriculture or a regular operation in forestry . Words agriculture and agricultural purposes with reference to land clearly imply that some operations must be carried on the soil of the land itself ; human skill and labour should be used for the purpose of ploughing the soil, manuring it, planting the trees or some similar process. Mere weeding, care and preservation of the trees which grow spontaneously are not operations on the soil of the land which are necessary to constitute the process a process of agriculture. In Maharaja of Kapurthala v. Commissioner of Income-tax, C.P. U.P. [1945] 13 ITR 74, a Bench of the Chief Court of Oudh held :- But we do not feel any doubt that the expression 'land used for agricultural purposes' in the Income-tax Act d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their Lordships of the Privy Council shows that the expenditure of skill and labour must be upon the land and not merely on the trees which are already growing on it as a result of spontaneous growth. In the present case, mere regeneration and preservation of trees by human agency cannot be said to be expenditure of skill and labour upon the land itself. Clearly, therefore, it is not possible to hold that, in this case, the land was being used for agricultural purposes or that the process of agriculture was being carried on. Planned and scientific exploitation of a forest of spontaneous growth, though it might yield regular income, would not be income from agriculture as no operations are carried out and no human skill or labour is expended in such a case on the land itself. Learned counsel for the assessee has relied on a decision of the Calcutta High Court in Commissioner of Agricultural Income-tax, West Bengal v. Raja Jagadish Chandra Deo Dhabal Deb [1949] 17 ITR 426, where the Bench expressed the view that It is clear that in this case neither any tilling of the boil nor sowing of seeds or grafts nor watering is required. Had any one or more of these operations been prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on two aspects. The crop should be grown on land aided by human labour and effort and further it should not grow wild or spontaneously on the soil without human labour or effort. In the case before us, the trees have been held to be of spontaneous growth an-1 it is not shown that human labour or effort was utilised in aiding the growth of the trees. Finally, the learned counsel for the assessees also relied on a decision of the Assam High Court in Jyotirindra Narayan Sinha Choudhury and Others v. The Stale of Assam [1951] 19 ITR 379 . That case is of no assistance because, in that case, the decision proceeded on the finding that the forest trees, as they existed at the time when the question of assessment of the income from those trees arose, were the result of operations in forestry that were undertaken for their growth and regeneration and were not the original trees of spontaneous growth. It was also found to be an admitted fact that the forest trees had to be protected and fostered in growth by the application of human labour and skill and that regular operations were being undertaken for their growth, preservation and regeneration. Fertilisation of the ground was also carr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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