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Interpretation of agricultural income for tax purposes. Analysis: The judgment involves a reference under Section 66(1) of the Indian Income-tax Act concerning the inclusion of revenue items in the total income of the assessee, which was objected to as revenue derived from land used for agricultural purposes and assessed to land revenue. The disputed items included the sale of catechu, Kahcharai, Narkul Jalkar, forest timber, grass, phus, bhang, and fruits like mango, imli, and kathal. The Income-tax Officer, Appellate Assistant Commissioner, and Income-tax Appellate Tribunal all concluded that the receipts were taxable as the land was not used for agricultural purposes, despite being assessed to land revenue. The primary issue was whether income from the sale of items like forest trees, wild grass, and fruits of spontaneous growth on land assessed to land revenue qualifies as agricultural income exempt from income tax under Section 4(3)(viii) of the Income-tax Act. The Tribunal relied on previous court decisions to determine that items of wild and spontaneous growth do not fall within the definition of agricultural income, thus are assessable to income tax. The judgment cited various cases, including Chandrasekhara Bharati v. Duraiswami Naidu, Commissioner of Income-tax v. T. Manavedan Tirumalpad, and Province of Bihar v. Maharaja Pratap Udai Nath Sahi Deo of Ratugrh, to support this position. The judgment further discussed the principles laid down in previous decisions, such as Maharaja of Kapurthala v. Commissioner of Income-tax and Special Manager, Court of Wards v. Commissioner of Income-tax, emphasizing that income from the sale of forest trees of spontaneous growth is not considered agricultural income. The court also referred to Kesho Prasad Singh v. Sheo Pragash Ojhja to establish that land used for a grove is not considered land held for agricultural purposes, hence income from fruits of trees of spontaneous growth is not exempt from income tax. The judgment addressed the contention that items like grass, phus, and jhau growing on land used by agriculturists should be deemed as agricultural income. However, the court dismissed this argument, stating that including income from such items in the definition of agricultural income would lead to absurd results exempting various manufacturers and traders catering to agriculturists from income tax. The court also highlighted a previous case where income from the sale of forest trees and wild grass of spontaneous growth was deemed not to be agricultural income, reinforcing the position that such items are taxable. In conclusion, the court held that none of the disputed items qualified as agricultural income exempt from income tax, based on the precedents and principles discussed in the judgment. The court's decision was based on the interpretation of agricultural income for tax purposes as per the provisions of the Income-tax Act and relevant case law.
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