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Issues Involved
1. Whether the sum derived from the sale of Sal trees in the forests can be treated as agricultural income under Section 2 of the Bengal Agricultural Income-tax Act, 1944. Issue-wise Detailed Analysis 1. Definition and Scope of Agricultural Income The primary issue is whether the income derived from the sale of Sal trees can be classified as "agricultural income" under Section 2 of the Bengal Agricultural Income-tax Act, 1944. Agricultural income is defined in Section 2(1) of the Act, which includes: - (a) any rent or revenue derived from land used for agricultural purposes and assessed to land revenue. - (b) any income derived from such land by agriculture, or by processes ordinarily employed by a cultivator to render the produce fit for market. 2. Interpretation of Agriculture The term "agriculture" is not explicitly defined in the Act. Various dictionary definitions and legal interpretations were considered to understand its scope. The term is broader than "cultivation" and includes activities such as tillage, husbandry, and farming. The court emphasized that the definition should be interpreted in the context of the Act and not based on other statutes. 3. Judicial Precedents The court referred to several judicial precedents to determine whether the income from forest trees can be considered agricultural income: - Raja Mustafa Ali Khan v. Commissioner of Income-tax: The Judicial Committee held that income from forest trees growing naturally without human intervention is not agricultural income. - In re Moolji Sicka & Co.: Income from tendu leaves, which involved human intervention in the form of pruning and plucking, was considered agricultural income. 4. Human Intervention and Regular Operations The court examined whether there was sufficient human intervention in the forest operations: - The forest consisted mainly of Sal trees sold for fuel and posts. - The forest was divided into blocks, and trees were sold when about 15 years old. - New shoots grew from stumps after cutting, and the ground was kept free from undergrowth. - Forest guards protected the new shoots from damage by cattle and men. 5. Application of Human Efforts The court noted that the assessee carried on "regular operations in forestry," which involved human efforts such as guarding new shoots and removing undergrowth. These activities were considered significant, although they did not involve traditional agricultural practices like tilling or sowing. 6. Land Used for Agricultural Purposes The court concluded that the land was used for agricultural purposes due to the regular forestry operations. The term "agriculture" was interpreted in its wider sense, which includes forestry operations requiring skill and labor. Conclusion The court held that the income from the sale of Sal trees in this particular case could be treated as agricultural income under the Bengal Agricultural Income-tax Act, 1944. The question referred to the court was answered in the affirmative. Each party was ordered to bear its own costs. Separate Judgment - DAS, J.: Agreed with the judgment and the reference was answered accordingly.
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