1973 (6) TMI 16 - HC - Income Tax

Summary

Issues:
1. Whether the sale proceeds of rubber trees can be separated into the value of the trees and the value of the latex for tax assessment.
2. Whether income attributed to certain processes is assessable as agricultural income.
3. Whether the agricultural income-tax department can disregard the assessment of Central income-tax authorities and apportion expenditure differently.

Analysis:
The judgment pertains to four assessment years and addresses various questions raised by the assessee. The first issue involves determining if the sale proceeds of rubber trees can be divided into the value of the trees and the value of the latex extracted. The court refers to a previous decision where it was established that the amounts received for permitting cutting of trees and extracting latex must be bifurcated. The portion related to latex is considered agricultural income liable to tax, while the value of trees is not. The court applies this principle to the current case involving a company as the owner of rubber trees, concluding that the consideration received must be split accordingly for tax purposes.

Regarding the second issue, the court notes that questions related to income attributed to certain processes have become academic due to previous rulings that such income is not assessable under the Income-tax Act. Consequently, the court declines to answer these questions as they are no longer relevant.

The third issue involves the harmonization of assessments and expenditure apportionment between the State and Central income-tax authorities. The court emphasizes the importance of following the basis and assessment of the Central authorities, rejecting inconsistent methods by the agricultural income-tax department. The judgment underscores the need for proper apportionment based on the Central authorities' approach.

In conclusion, the court rules in favor of the revenue and against the assessee on the first issue, affirming that the consideration received for rubber trees must be divided for tax assessment. The court orders the assessee to bear the costs of the references and advocates' fees. Additionally, a copy of the judgment is to be sent to the Appellate Tribunal for further action.