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TMI Blog1966 (10) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1956, and March 31, 1957. The appellant explained that those sales represented not the produce of the year of account, but accumulated stocks of the past 3 to 4 years. That explanation was rejected by the Agricultural Income-tax Officer and after allowing expenditure estimated at the rate of Rs. 120 per acre, the balance was brought to tax, and a penalty of Rs. 3,000 was levied under section 20(1)(c) of the Act. The order was confirmed in appeal to the Appellate Assistant Commissioner, both as to the levy of tax and penalty. But the Appellate Tribunal was of the view that the average production of cardamom per acre was 40 lbs. and that if the stocks of cardamom sold in the year of assessment be attributed to production of the year, the yi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to have directed determination of the produce which was actually derived from agriculture in the year of account, and ought to have brought to tax only that quantity and excluded the value of the rest from taxation under the Act. Section 3 of the Act imposes the charge of tax upon the total agricultural income of the previous year of every person, and by section 4 the total agricultural income of any previous year of any person comprises all agricultural income derived from a plantation within the State and received within or without the State. " Agricultural income " is defined (in so far as the definition is relevant in these appeals) as meaning : " (1) any rent or revenue derived from a plantation; (2) any income derived from such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a commodity in the business of the assessee from which the assessee obtains benefit of the commodity may be deemed to give rise to income. Therefore, merely because the produce of his plantation was received in the earlier years, assuming that the appellant's case is true, income derived from sale of that produce in the year of account is not exempt from tax under the Act, in that year. Counsel for the appellant strongly relied upon a judgment of this court in Dooars Tea Co. Ltd. v. Commissioner of Agricultural Income-tax, a case decided under the Bengal Agricultural Income-tax Act, 1944 (4 of 1944). It was held in interpreting the definition of section 2(1)(b) of the Bengal Agricultural Income-tax Act, 1944, which is in substantially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural produce when received by a person carrying on agricultural operations becomes income in his hands. The court in that case was concerned to deal with a limited question whether a person who has raised agricultural produce instead of selling it uses that produce for his own business, can he be said to have earned agricultural income ? The court in that case held that he would be deemed to be earning income. The decision is authority for the proposition that for agricultural income to arise, it is not predicated that the agricultural produce must be sold : user of agricultural produce for the purpose of the business of the assessee may give rise to agricultural income. The decision in State of Kerala v. Bhavani Tea Produce Co. L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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