1952 (4) TMI 44 - HC - Income Tax

Summary

Issues:
Whether the income from the sale of milk received by the assessee during the accounting year qualifies as 'agricultural income' under the Income-tax Act.

Analysis:
The case involved a Hindu family owning agricultural land and cows, selling surplus milk. The Income-tax Officer estimated milk sale profits at Rs. 4,000, assessing it as income. The definition of agricultural income under Section 2(1) of the Act was crucial. The Full Bench of the Rangoon High Court in a prior case emphasized the importance of cattle sustenance from the land to determine agricultural income.

The judgment discussed the definition of agriculture and agricultural income, citing previous cases. The court agreed with a wide interpretation of agriculture, including livestock rearing. The key question was whether the milk sold constituted agricultural produce. The court highlighted the relevance of cows being fed primarily from the agricultural land owned by the assessee.

The Tribunal's grounds for not considering the income as agricultural included irrelevant factors like the number of cows or organized milk sales. The court emphasized that the primary focus should have been on whether the cows were fed from the land. Lack of accounts didn't necessarily disprove the agricultural nature of the income. The court criticized the Tribunal's failure to address this crucial aspect.

The court concluded that there was no evidence to support the Tribunal's view that the milk sales were not agricultural produce. The absence of material showing otherwise led the court to determine that the income from milk sales should be considered agricultural income. The court's decision was based on the lack of substantial evidence contradicting the agricultural nature of the income.

In summary, the court held that the income from the sale of milk by the assessee should be classified as 'agricultural income' under the Income-tax Act. The judgment emphasized the importance of cows being primarily fed from the agricultural land owned by the assessee to determine the agricultural nature of the income. The Tribunal's grounds for disqualifying the income lacked substantial evidence, leading the court to rule in favor of considering the income as agricultural.