9911796707
|
Home
Issues:
1. Whether income from the sale of forest trees growing naturally is agricultural income exempt from income-tax. 2. Whether the question of income vs. capital was raised during assessment. 3. Interpretation of Section 66(1) of the Income-tax Act regarding references to the High Court. 4. Applicability of previous judgments on the current case. Analysis: 1. The High Court of Oudh considered references by the Income-tax Tribunal regarding the assessment of income from the sale of forest trees. The main issue was whether such income qualifies as agricultural income exempt from income-tax under the Income-tax Act. The Court examined the nature of the receipts and the source of income in two separate cases for the assessment years 1940-41 and 1941-42. The Court noted that the question referred assumed the receipts were income, without considering whether they could be classified as capital. 2. The Court observed that the question of whether the receipts constituted capital instead of income was not raised during the assessment proceedings. The Assessee and the Tribunal focused on whether income derived from forests is taxable, with no mention of the capital classification. Despite arguments by the Assessee's Counsel regarding loose usage of the term "income," the distinction between income and capital was never formally raised as an issue during the proceedings. 3. The Court delved into the interpretation of Section 66(1) of the Income-tax Act concerning references to the High Court. It discussed the ambiguity in the provision and clarified that the applicant can request the Tribunal to refer any question of law arising from the order, not a general statement of the case. The Court emphasized that the Tribunal must draw up a statement of the case to explain how the question of law arises, and the High Court's decision is limited to the specific question referred. 4. Referring to previous judgments, the Court cited a case where it was held that the High Court's role in cases referred under Section 66 is advisory and confined to the actual question referred. The Court applied a similar analysis from a previous case where it was determined that income from the sale of forest trees did not qualify as agricultural income under the Income-tax Act. Consequently, the Court provided the same answer in the current cases, ruling that the income was not exempt from income-tax. The Assessee was directed to pay the costs of each reference, with a fixed fee for the Income-tax department's counsel.
|
