9911796707
TMI Blog2018 (12) TMI 274X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in confirming the order of the Assessing Officer who has passed order without providing copies of documents received from the District Collector, Thane in response to letter dt. 11/11/2016 and also not giving an opportunity for cross examination of the said documents was given, hence the order confirmed by the CIT(A) is bad in law and liable to be quashed. II. Violation of Rule 46A - Additional evidence filed during appellate proceedings, rejected by the CIT(A) 2. The Learned CIT(A) erred in not accepting the Additional evidence filed by the Appellant during the appellate proceedings in the form of certificates issued by the various authorities showing the land was agricultural land. As the said evidences were not available at the time assessment and the assessing officer has not given a reasonable opportunity, hence, additional evidence may be accepted and addition confirmed by the C1T(A) may be deleted. Without prejudice to above, III. Sale of Agricultural Land treated as Capital Assets u/s.2(14) and taxed as Short Term Capital Gain of Rs. 3,98,84,086/- 3. The Learned CIT(A) erred in taxing Rs. 3,98,84,086/- received against the sale of agricultural land as a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee for agricultural activities as no actual cultivation was ever carried out by assessee as well as even by the previous owner from whom the land was purchased by the assessee. The AO also observed that the current purchaser who purchased the plot of land from the assessee has also not purchased the land for agricultural purposes but for real estate development. The AO observed that the assessee has sold the aforesaid land by not valuing the same based on agricultural yield but for real estate development. The AO also observed that the process for converting the said land into a non-agricultural land, was initiated way before the sale agreement was executed by the assessee on 31.10.2013 as could be seen from the clearance certificate issued by Forest Department dated 25.10.2013 and Executive Engineer, Bhatsa Canal Division no. 1, Tal Shahapur dated 07.10.2013. The assessee was asked by the AO to explain the same . The assessee submitted that the land in question is an agricultural land keeping in view provisions of Section 2(14) of the 1961 Act. It referred to amended provisions of Section 2(14) which were amended by Finance Act,1970 wherein CBDT clarified by Memorandum vide pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). The assessee submitted that it is the buyer who obtained the permission for converting agricultural land into non-agricultural land and it is the buyer Mr. Sachin S. Lodha who made an application for conversion of land on 02.08.2014 whereas the property was sold on 31.10.2013 . It was submitted that conversion order was passed by District Collector , Thane on 11.11.2014. It was submitted that the assessee only obtained clarification from Forest Department whether land is under forest area. The assessee submitted that it obtained clarification from Town Planning Department as to whether any proposal for development of that land by Government is on anvil. The assessee submitted that in the revenue records , land is agricultural and never sought to be used for non agricultural purpose by the assessee till it was sold by the assessee and hence the same is to be treated as agricultural land , even though no agricultural income was shown by the assessee in the return of income filed with the Revenue and hence no capital gains was chargeable to tax on the said land. The assessee relied upon judgment of Hon‟ble Bombay High Court in the case of CIT v. Smt. Debbie Alemao reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the sale of the land in question to Shri Swapnil Shende and Shri Sachin Lodha , initiated the procedure required to obtain the documents required for acquiring permission for conversion of the said land to Non-agricultural purposes . The AO observed that the assessee has obtained following documents before the date of sale of land on 31.10.2013 , as under:- a) Zone Certificate issued by the Asstt. Director, Town Planning, Thane dated 23/08/2013 issued on the request of the assessee, wherein it has been mentioned that the said land has not been acquired or earmarked for any regional development. b) Clearance Certificate dated 25/10/2013 issued by the Forest Department to the effect that the said land has not been acquired or designated as Forest land. c) No Objection Certificate dated 07/10/2013 issued by the Executive Engineer, Bhatsa Dam Division No 1 to the effect that the said land did not fall within the catchment area of Bhatsa Dam. The AO during the course of assessment proceedings also obtained copies of aforesaid mandatory documents along with applications dated 27.12.2013 and revised application dated 02.08.2014 filed from the office of District Collector, Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital assets‟ not liable to be taxed under the head 'Capital Gain‟ cannot be acceded to and is therefore rejected. 9. In the assessee‟s case , the said land was acquired vide purchase agreement executed on 16/10/2012 and the same was sold as on 31/10/2013. Thus, on the basis of the holding period of the said land, the assessee is taken to have earned Short Term Capital Gain and is taxed accordingly. Therefore, the exemption claimed by the assessee u/s 10(37)(ii) of the Income-tax Act,1961 for an amount of Rs. 3,98,84,086/- is disallowed and the same is taxed as Short Term Capital Gain of the assessee...." 4. Aggrieved by the assessment order dated 22.12.2016 framed by the AO u/s 143(3) of the 1961 Act, the assessee filed first appeal before the Ld. CIT(A). The assessee reiterated its submissions before learned CIT(A) as were made before the AO which are not repeated. The assessee also submitted before learned CIT(A) that the said land was sold by the assessee for Rs. 4,10,00,000/- to the developer Mr. Sachin Lodha , as against market value of Rs. 3,43,43,000/- . It was submitted that the buyer imposed the condition that clearances/NOC from forest department be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under cultivation was an agricultural land. The assessee did not furnish any credible evidences which could prove that land under cultivation was an agricultural land nor the assessee produced these parties who had issued certificates, affidavits and letters regarding claim that the land was an agricultural land . The Learned CIT(A) rejected the contentions of the assessee and refused to admit additional evidences on the grounds that it did not satisfy the conditions prescribed under Rule 46A of the Income-tax Rules, 1962. The Ld. CIT(A) dismissed the appeal of the assessee by holding as under, vide appellate order dated 27.02.2018:- " 4. Aggrieved with the disallowance of claim of Rs. 3,98,84,086/-, the appellant preferred the present appeal and raised the above grounds of appeal. During the course of appellate proceedings, the Ld. AR of the appellant, by and large, reiterated the same submissions/ arguments, as had been made before the AO, during the course of assessment proceedings. During the course of appellate proceedings the Ld. AR admitted the fact that the land under dispute was never cultivated by the appellant and accordingly in the return of income the income from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an agricultural land, certificate dated 17.1.2008 from Sub-registrar stamp confirming that the land was an agricultural land and xerox copy of letter dated 23.2.2018 from Sachin Lodha, buyer, stating that he had requested to obtain the above certificates and accordingly requested to admit the same under rule 46A of the IT Rule, 1962. 4.2 In order to ascertain the genuineness of above claim, vide order sheet noting dated 16.2.2018, the Ld. AR. was requested to furnish credible documents regarding cultivation of land and other facts and was also requested to produce the concerned persons who have issued various certificates, certifying the fact that the land under dispute is an agricultural land. In compliance the Ld. AR neither could furnish any credible evidences which could establish the fact that the land under dispute is an agricultural land nor could produce these persons who had issued various certificates / letters / affidavits regarding their claim that the land was an agricultural land. It is further noticed that during the course of assessment proceedings, the appellant was given ample opportunities of being heard to justify the claim of agricultural land, but squarely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment stage vis-a-vis at appellate stage. These contentions of the appellant are nothing but fabricated for claiming benefit of agricultural land. As per above details it is seen that the appellant had sold the land for Rs. 4.10 crores (29.10.2013) i.e. 34.17 times of cost i.e. Rs. 12 lacs (16.10.2012), thereby earned huge profit of Rs. 3.98 crores by investing meager amount of Rs. 12 lacs, within a span of no times. On the other hand the poor farmer was paid only Rs. 12 lacs for the said land. 5. I have carefully considered the facts of the case, the findings of the AO, submissions of the Ld. AR and material placed on record. From the facts of the case it is noticed that the appellant derives income from supply of building material and rental income from three properties. During the year under appeal, the appellant had sold a land admeasuring 5.22 Acres on 31.10.2013, situated at Shahapur, Dist. Thane, for total consideration of Rs. 4,10,00,000/-, as against market value for stamp duty of Rs. 3,43,43,000/-. The same was claimed to have been purchased for total consideration of Rs. 12 lacs on 23.9.2008, after paying part payment, by obtaining the irrevocable power of attorney. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificate dated 17.10.2013 from Executive Engineer, Bhatsa Division No. 1, before selling the land to the developer. 5.2 It is further noticed that the application filed by the appellant in the office of the Collector, for converting land use to non-agricultural land, was also processed and was given understanding that in view of the certificates, the land under dispute will be converted into N.A. Accordingly, the land under dispute was sold to Shri Swapnil Shende and Sachin Lodha on 31.10.2013, for total consideration of Rs. 4,10,00,000/-, as against the market value of Rs. 3,43,43,000/-, on which stamp duty of Rs. 16,40,000/- was also paid on 29.10.2013. It is pertinent to mention here that on 16.10.2012, the land under dispute was registered in the name of appellant, in view of the above irrevocable power of Attorney dated 23.9.2008, obtained from the original owner i.e. Shri Shankar Tukaram, by paying the differential amount of stamp duty of Rs. 100/- and registration charges of Rs. 780/-, as the appellant had already paid the stamp duty of Rs. 48,000/- and registration charges of Rs. 12,660/- on 23.9.2008, by paying the part sale consideration. It is further noticed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy & other crops were cultivated, during appellate proceedings the appellant was required to furnish documentary evidences regarding labor expenses, seed expenses, fertilizer expenses, cultivation expenses, harvesting expenses, marketing expenses, sales bills along with name and address of the person who had cultivated the land and produce them for verification. In compliance, the appellant could not furnish these documents and merely stated that the land under dispute was never cultivated but was located in rural area, therefore, liable to be treated as agricultural land. As regard the request for cross verifying the District Collector, Thane, for supplying various correspondences /documents / NA certificates, etc. to AO is concerned it was explained that the said documents are available in the public domain and relate to sale of your land and the same were in the knowledge of the appellant, therefore, the AO has not used the same in the back of the appellant. The Ld. AR accordingly withdrew the claim of cross verification of District Collector, Thane. As regard the claim of stamp duty and registration charged of Rs. 60,660/- against purchase of land on 23.9.2008 is concerned, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same as agricultural land, in view of the above facts. Keeping in mind the various factors such as holding periods, intention of purchase and sales, etc, in my considered view, the appellant had carried out trading of adventure in nature, for harvesting maximum profit and not for the investment in the land for agricultural purposes. In this regard, the reliance is placed on the ratio laid down in the following cases: - A CIT Vs Subramaniam Vadivel (TS-206-ITAT) (2013) (CHNY) "Land even if situated outside municipal limits or in remote villages, constitutes capital asset absent any agricultural operations; Sale consideration, thus taxable as capital gains; Mere bifurcation of land in revenue records as 'agricultural' would not make it so; Agricultural history of land is not the only test to be applied to decide the character at the time of sale; Lands must be utilized for economical agricultural activities and should generate meaningful income; ; Distinguished co-ordinate bench ruling in Pallava Resorts: Chennai ITAT Raja J Rameswar Rao Vs CIT(SC) 42 ITR 179 When a person acquires land with a view to selling it later after developing it, he is carrying on an act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Benoy Kumar Sahas Roy [1957] 32 ITR 466 (SC), CWT vs. Officer-in-charge (Court of wards) [1976] 105 ITR 133 (SC), T. Sarojini Devi Vs. T. Sri Krishna AIR 1944 Mad. 401 and CIT vs. V.A. Trivedi [1988] 172 ITR 95 (Bom.). CWT vs. Officer-in-charge (court of wards) [1976] 105 ITR 133 (SC) popularly known as Begumpet Palace case-In this case., the Constitution Bench of the S. C., inter-alia, held that; "(a) ....The idea behind exempting the agricultural land is to encourage cultivation of land and the agricultural operatlons. In the other words this exemption had to be necessarily given a more restricted meaning than the very wide ambit given to it by the Full Bench of the Andhra Pradesh High Court (b) What is really required to be shown is the connection with an agricultural purpose and user and not the mere possibility of use of land by some possible future owner or possessor, for an agricultural purpose. It is not the mere potentiality but its actual condition and intended user which as to be seen for purpose of exemption, (c) The person claiming an exemption of any property of his from the scope of his assets must satisfy the conditions of the exemption, (d) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtions of land for non-agricultural use? 11) Whether permission u/s 63 of the Bombay Tenancy and Agricultural Lands Act, was obtained because the sale or intended sale was in favour of a non-agriculturist? If so, whether the sale or intended sale to such non-agriculturist was for non-agricultural or agricultural user? (12) Whether the land was sold on yardage or on acreage basis? (13) Whether an agriculturist would purchase the land for agricultural purpose at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield. At the risk of repetition, we may mention that not all these factors would be present or absent in any case and that in each case one or more of those factors may make appearance and that the ultimate decision will have to be reached on a balanced consideration of the totality of circumstances " CIT V. VA Trivedi (1998)-l72 ITR 95, a Division Bench of the Bombay High Court observed-that to ascertain the true character and the nature of the land, it must be seen whether the land has been put to use for agricultural purposes for a reasonable spa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 347 CIT Vs M Krishna Rao (AP) 120 ITR 101 - Land purchased had potentiality of being developed into building site - No agricultural operations were carried out on land by the assessee -Adventure in the nature of trade. 5.7 In view of the above discussion, in my considered view, the AO has rightly assessed the gain from the sale of open land as STCG, therefore, sustained. The AO, however, is directed to allow the claim of expense of Rs. 60,660/-, against stamp duty and registration charges, incurred against purchase of land. All the grounds of appeal are decided accordingly. In result the appeal is partly allowed." 5. Aggrieved by the appellate order dated 27.02.2018 passed by learned CIT(A), the assessee has come in an appeal before the tribunal. The Ld. Senior Counsel for the assessee submitted at the outset that the AO has obtained certain documents directly from the office of District Collector , Thane at the back of the assessee which were never confronted to the assessee before prejudicing the assessee by disallowing the claim of exemption claimed by the assessee from income-tax on gains arising from sale of land wherein the assessee on the grounds that the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stored to the file of AO for denovo determination of the issue on merits in accordance with law . The learned DR would rely on the appellate order passed by learned CIT(A). 7. We have considered rival contentions and perused the material on record including orders of authorities below and paper book filed by the assessee. We have observed that the assessee is engaged in the business of building material . The case of the assessee was selected by Revenue for framing scrutiny assessment u/s 143(3) read with Section 143(2) of the 1961 Act. During the impugned assessment year under consideration, the assessee sold an plot of land situated at village Khardi, Taluka: Shahapur admeasuring 5.22 acres for Rs. 4,10,00,000/- to Mr Swapnil Shende and Mr Sachin Lodha and claim is made by the assessee that the said land is an agricultural land which was used for agricultural purposes by the assessee on which gains of Rs. 3,98,84,086/- have arisen on its sale on 31.10.2013 and the gains arising from sale of aforesaid land to the tune of Rs. 3,98,84,086/- were claimed to be an exempt income from income-tax keeping in view provisions of Section 10 of the 1961 Act. The assessee claimed that the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stamp duty of Rs. 48,000/- and registration fee of Rs. 12,660/- was also paid by the assessee at the time when registered purchase agreement and irrevocable power of attorney was executed in favour of the assessee by the seller Mr Shankar Tukaram on 23-09-2008. It is also claimed that only differential stamp duty of Rs. 100/- and registration charges of Rs. 780/- was paid by the assessee when the purchase deed was finally registered on 16.10.2012 in favour of the assessee by the seller, Mr Shankar Tukaram. The provisions of Section 53A of the Transfer of Property Act,1882 was invoked by the assessee to contend that the land was transferred to the assessee on 23.09.2008 as contemplated u/s 2(47) of the 1961 Act , as part payments were already made by the assessee to the seller namely Mr Shankar Tukaram on or around 23-09-2008 to the tune of Rs. 11 lacs out of total consideration of Rs. 12 lacs , which was further supported by handing over of the possession of the plot of land by Mr Shankar Tukaram, the seller in favour of the assessee and consequently the transfer of property as is contemplated u/s 2(47)(v) of the 1961 Act stood completed. The assessee has also claimed that in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities below have also observed that during the period of three years beginning with assessment year(s) 2012-13 to 2014-15 the assessee did not show any income from agriculture in the return of income filed by the assessee with Revenue which as per Revenue is an strong indicator that no agricultural activities whatsoever were carried on by the assessee on the said land. The assessee is claiming that it grew grass, rice and plantation on the said land which is disputed by Revenue , as also that the assessee did not produce any documentary evidences to show that cultivation activities were carried on by him on the said land as no invoices for purchase of seeds, fertilizers, equipments, electricity bills etc were produced. The claim of the assessee that it did not had any surplus from agricultural activities and hence it was not shown in the return of income filed with the Revenue for the impugned assessment year were also rejected by the authorities below on the grounds that it is not probable that for continuous three years in a row from AY 2012-13 to 2014-15, there was no surplus. The authorities below have also observed that when the land was held by the assessee , then during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion that the buyer Mr Swapnil Shende and Mr Sachin Lodha also bought aforesaid land for commercial development purposes and not for the purpose of carrying on agricultural activities on the said land. The authorities below also observed that registered purchase agreement for transfer of land in favour of the assessee was finally executed by the seller, Mr Shankar Tukaram on 16.10.2012 and the Revenue did not accepted the initial registered purchase agreements and irrevocable power of attorney both dated 23.09.2008 executed by seller, Mr Shankar Tukaram in favour of the assessee. The land was undisputedly sold by the assessee on 31.10.2013 to Mr Swapnil Shende and Mr Sachin Lodha. Based on the above factual matrix of the case, it was held by authorities below that the said land was held by the assessee for not more than thirty-six months before being sold and the gains arising there from are short term capital gains. Further , it was held that the assessee is not entitled for exemption from income-tax on the ground that the aforesaid land was not an agricultural land and was not used for agricultural purposes. Undisputedly, the buyer Mr Sachin Lodha applied with District Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land from whom the assessee purchased the land, averring that agricultural activities were carried out on the said land. c) Certificate dated 06.01.2017 from Shahpur Agricultural Produce Committee to certify that grass is an agricultural product d) Certificate dated 19.04.2017 from Tehsildar certifying that the land under dispute was an agricultural land. e) Certificate dated 17.01.2018 from Sub-Registrar stamp confirming that the land was an agricultural land. f) Xerox copy of the letter dated 23.02.2018 from Mr. Sachin Lodha , buyer of the land stating that he requested the assessee to obtain mandatory certificates required for conversion of agricultural land into 'Non Agricultural‟ purposes. The learned CIT(A) did not admitted aforesaid additional evidences filed by the assessee during appellate proceedings citing bar as contained in Rule 46A of the 1962 Rules. The assessee on being asked by learned CIT(A) did not produce these parties before learned CIT(A) for their cross examination. In our considered view , these additional evidences filed by the assessee with learned CIT(A) for the first time are produced by the assessee to substantiate its case that the land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands overruled." Thus, since the assessee is seeking exemption from income-tax on the gains arising from the sale of aforesaid land claiming the same to be agricultural land used for agricultural purposes by the assessee during the period when it was held by the assessee, the onus is on the assessee to prove that his case strictly comes within the parameters of the exemption clauses as are contained in the 1961 Act which are to be strictly construed. It is also well established rule of evidence as enshrined in Section 114(g) of the Indian Evidence Act, 1872 that the evidences which could be and is not produced would , if produced , be unfavourable to the person who withholds it. It is incumbent on the assessee to produce all cogent evidences to substantiate and prove its case that gains arising from sale of land are exempt from income-tax. Further, we are also reminded at this stage of landmark decision of Hon‟ble Supreme Court decision in the case of CIT v. Raja Benoy Kumar Sahas Roy reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l rates assessed and collected by the officers of the Government as such ; and (ii) that the income should be derived from such land by agriculture or by one or the other of the operations described in clauses (ii) and (iii) of section 2(1)( b) of the Indian Income-tax Act. It was at one time thought that the assessment of the land to land revenue in the taxable territories was intended to exempt the income derived from that land from liability for payment of income-tax altogether and that theory was based on the assumption that an assessee who was subject to payment of land revenue should not further be subjected to the payment of income-tax, because if he was so subjected he would be liable to pay double taxation. It is interesting to note at this stage the genesis of the provision exempting agricultural income derived from the lands assessed to land revenue as understood by the Courts. Viswanatha Sastri, J., in this context observed in Commissioner of Income-tax, Madras v. Sundara Mudaliar [1950] 18 ITR 259 at page 270 : "I shall briefly advert to the genesis of the provision exempting agricultural income derived from lands assessed to land revenue, as I consider that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quality of the soil and the income derived from the produce of the lands, and therefore the exemption from income-tax was limited to agricultural income derived from assessed lands. Such is the reason for exemption from income-tax of agricultural income". Whatever may have been the genesis of the exemption of agricultural income from income-tax, the liability to pay land revenue or fixed peishkush under Regulation XXV of 1802 was not considered by Rankin, J., as a deterrent against the levy of income-tax in appropriate cases, even on certain classes of income derived from the permanently settled estates, if that was the clear intention of the legislature. The learned Judge observed in Emperor v. Probhat Chandra Barua [1924] ILR 51 Cal. 504: "Some reference was made at the bar to the practice of the Revenue Authorities since 1886 as regards fisheries in permanently settled estates, but there is no agreement as to what that practice-if there be a practice-has been. Assuming that it would have been open to us to place some degree of reliance upon an interpretation settled by practice as contemporanea expositio we are in fact without any such assistance". "Some reference was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is understood is agar-field and cultra-cultivation, i.e., the cultivation of the field, and if the term is understood only in that sense agriculture would be restricted only to cultivation of the land in the strict sense of the term meaning thereby, tilling of the land, sowing of the seeds, planting and similar operations on the land. They would be the basic operations and would require the expenditure of human skill and labour upon the land itself. There are however other operations which have got to be resorted to by the agriculturist and which are absolutely necessary for the purpose of effectively raising the produce from the land. They are operations to be performed after the produce sprouts from the land, e.g, weeding, digging the soil around the growth, removal of undesirable undergrowths and all operations which foster the growth and preserve the same not only from insects and pests but also from depredation from outside, tending, pruning, cutting, harvesting, and rendering the produce fit for the market. The latter would all be agricultural operations when taken in conjunction with the basic operations above described, and it would be futile to urge that they are not agric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income derived therefrom can be said to be "agricultural income" derived from the land by agriculture. 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 Chetti v. Chinnathambi Gounden & Others [1901] ILR 24 Mad. 421, 423, or Sadasiva Ayyar, J., in Raja of Venkatagiri v. Ayyappa Reddi [1915] ILR 38 Mad. 738, but must be understood as comprising all the products of the land which have some utility either for con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es described in clauses (ii) and (iii) of section 2(1)( b) of the Act. These activities are postulated to be performed by the cultivator or receiver of rent-in kind of such land in regard to the products raised or received by him which necessarily means the produce raised on the land either by himself or by the actual cultivator of the land who pays such rent-in-kind to him. If produce raised or received by the cultivator or receiver of rent-in-kind is thus made the subject-matter of clauses (ii) and (iii) in section 2(1)( b) of the Act, the term "agriculture" used in clause (i) of section 2(1)(b) must also be similarly restricted to the performance of the basic operations on the land and there its no scope for reading the term "agriculture" in the still wider sense indicated above. If the term "agriculture" is thus understood as comprising within its scope the basic as well as subsequent operations in the process of agriculture and the raising on the land of products which have some utility either for consumption or for trade and commerce, it will be seen that the term "agriculture" receives a wider interpretation both in regard to its operations as well as the results of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee performs subsequent operations on these products of land which are of wild or spontaneous growth, the nature of those operations would have to be determined in the light of the principles enunciated above. Applying these principles to the facts of the present case, we no doubt start with the finding that the forest in question was of spontaneous growth. If there were no other facts found, that would entail the conclusion that the income is not agricultural income. But then, it has also been found by the Tribunal that the forest is more than 150 years old, though portions of the forest have from time to time been denuded, that is to say, trees have completely fallen and the proprietors have planted fresh trees in those areas, and they have performed operations for the purpose of nursing the trees planted by them. It cannot be denied that so far as those trees are concerned, the income derived therefrom would be agricultural income. In view of the fact that the forest is more than 150 years old, the areas which had thus become denuded and replanted cannot be considered to be negligible. The position therefore is that the whole of the income derived from the forest cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
