TMI Blog1957 (5) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ected against a common judgment and order passed by the Full Bench of the High Court of Judicature in Assam delivered on a consolidated reference by the Income-tax Appellate Tribunal under section 66(1) of the Act whereby Sarjoo Prasad, C.J., and Ram Labhaya, J., answered the referred question in the affirmative and Deka, J., answered it in the negative. The referred question was : " Whether on the facts and in the circumstances of this case the receipts from the sale of sal trees can be said to be agricultural income under section 2(1) and exempt from taxation under section 4(3)(viii) of the Income-tax Act ? " These appeals were consolidated and the High Court ordered that a consolidated amount of security of Rs. 4,000 together with one set of printing costs be deposited by the appellant, the Commissioner of Income-tax, Assam. The appellant filed one statement of case but the respondents in the six appeals filed separate statements of case each one of them. Smt. Jyotikana Chowdhurani, the respondent in Civil Appeal No. 51 of 1956, is the widow and legal representative of the late Jyotsna Nath Choudhury who was a co-sharer and proprietor of the Mechpara Estate situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so dismissed. The latter however referred the same question to the High Court under section 66 (1) of the Indian Income-tax Act, at his instance. Shrimati Sulochana Chowdhury, the respondent in Civil Appeal No. 59 of 1956, is the legal representative of the late Jagadindra Narayan Chowdhury who was a co-sharer proprietor of the Parbat-Joar and Mechpara Estates within the district of Goalpara in Assam. On March 24, 1947, the said Jagadindra Narayan Chowdhury was assessed to income-tax on his receipts from the sale of sal trees from his forests for the year 1946-47 by the Income-tax Officer, Gauhati. He preferred an appeal before the Appellate Assistant Commissioner of Income-tax, Calcutta " B " Range, but died during the pendency of the said appeal and was succeeded by his mother the respondent. The Appellate Income-tax Commissioner, Calcutta " B " Range, by his order dated March 15, 1948, reduced the assessment. The respondent preferred an appeal against the said order of the Appellate Tribunal which dismissed the appeal. The same question was referred by the Income-tax Appellate Tribunal to the High Court for its opinion under section 66(1) of the Indian Income-tax Act at the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8-49, respectively. He preferred appeals to the Appellate Assistant Commissioner of Income-tax, Calcutta " B " Range, and to the Income-tax Appellate Tribunal, Calcutta, without success and the Income-tax Appellate Tribunal referred the very question for opinion to the High Court under section 66(1) of the Indian Income-tax Act, at his instance. All these references were heard together by a Special Bench of the High Court and three separate judgments were delivered by the High Court, Sarjoo Prasad, C.J., and Ram Labhaya, J., being of the same opinion, Deka, J., dissenting. The facts appearing from the consolidated statement of case submitted by the Income-tax Appellate Tribunal, Calcutta, to the High Court were these : " It was admitted that the trees in the forest were of spontaneous growth (which is now stated by the representatives of the assessee that it meant of spontaneous germination), there was no planting or sowing nor were any human agency employed for the purpose of tilling the soil. From all that was done to the trees it was clear that the trees sold were those standing for a considerable number of years during which the soil had remained untouched. In the prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentative stated before the Tribunal that with regard to the Mechpara Estate, the expenses on forests establishment (including temporary hands) were estimated at Rs. 15,000 a year, the gross receipts being about Rs. 1,70,000. With regard to Parbatjoar Estate, whose gross receipts come to Rs. 3,32,414, the appellants' representative stated that a total sum of Rs. 14,057 had been spent on the following heads : 8 Forest Officers and 18 Barkandajas Rs. 5,219 32 Forest Guards Rs. 4,838 Proportionate salary of the Head Officers Rs. 4,000 ------------------------- Total Rs. 14,057 ------------------------- On these facts the majority of the judges held that even though there was no tilling of the land or planting of seeds or saplings and the trees were of spontaneous germination, the operations carried on by the assessees were conducive to the growth and development of the trees and in essence involved the expenditure of human skill and labour on the land itself. In the opinion of the Court those operations were " agricultural operations " and the land on which the trees stood was being used for " agricultural purposes " and, therefore, the income from the sale of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were of spontaneous growth. Nothing was done by the assessees to grow the trees from the soil itself. They had grown there by the process of nature. The obstacles which would retard the growth of these trees which had grown spontaneously from the soil were certainly removed but these operations would not convert these subsequent operations into basic operations which would be the only prerequisites for the cultivation of the forest land. Out of the categories (a) to (g) set out in the statement of facts, none of the operations was assimilated to basic operations in agriculture and unless and until there was even one basic operation on the land itself the rest of the operations could not be tacked on to them so as to convert the whole of them into agricultural operations. We are of opinion that the ratio adopted by the majority of the judges of the High Court was erroneous and the referred question ought to have been answered in the negative. We are fortified in this conclusion if regard be had to the fact that the forestry operations which were performed by the assessees were of insignificant value as compared with the gross receipts derived by them from the sale of the forest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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