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TMI Blog1950 (2) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... dispute; and it is also common knowledge that in order to raise casuarina plantation it is necessary to prepare the soil, raise seedlings, cultivate the land and plant them. After the plantation, the plants require watering for periods ranging from 3 to 5 years according to the nature and the quality of the soil. Even after the expiry of the period of 3 years or 5 years, the trees in order to facilitate their growth require pruning. The trees are cut usually 8 to 10 years after they are transplanted. It is therefore an undoubted fact that the tillage of the soil and the employment of labour and skill are required to grow a plantation. The wood of the trees is used mostly either for fuel or for building purposes. The question is whether the income realised by the sale of the trees after they are cut is agricultural income within the meaning of Section 2(1) of the Act and exempt from taxation under Section 4(3)(viii). The Act defines "Agricultural income" in these terms:- " 'Agricultural income' means- (a) any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land-revenue in British India or subject to a l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning ascribed to the word "agriculture" in other statutes. Their Lordships, however, did not decide the question whether even if the trees were planted on the land and cultivated in the regular course of arboriculture, the land could be said to be used for agricultural purpose as it was not necessary for the decision of the case before their Lordships. It is that question that is raised in this reference. The test laid down in that decision is satisfied in the present cases as the trees did not grow on the land spontaneously but were the result of cultivation of land, expenditure of skill and labour on it by the assessee. Even if the trees were raised by human labour on the land, unless the purpose was agriculture, the definition would not apply and the exemption does not operate. The land according to the definition should be used for agricultural purpose. Is the raising of casuarina plantation on the land an agricultural purpose? According to the concise Oxford Dictionary "agriculture" means "cultivation of the soil". Webster's Dictionary gives the meaning of "agriculture" as "farm, horticulture, forestry, butter and cheese ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Act, 1935, was considered, throws considerable light and also supports the view that unless there is something in the language of the enactment the word "agriculture" must be interpreted in the general sense and not in a restricted and narrower sense. It is unnecessary again to subject the decisions to a detailed examination which have been, if I may say so with respect, ably considered by the learned Judge and it will be sufficient to state the conclusion of the learned Judge which occurs at page 68. He observed: "We are of opinion that for the purposes of the relevant entries in Lists II and III of Schedule VII, the expression 'agricultural land' must be taken to include lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpose of husbandry. It follows that the mango grove in question is agricultural land in respect of which the Hindu Women's Rights to Property Act 1937, does not operate to regulate succession." The trend of the decision of Varadachariar, J., in Federal Court in Megh Raj v. Allah Rakhia [1942] ILR 23 Lah. 623 also supports the views of Patanjali Sastri, J. In Kaju Mal v. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etel garden is a lease for agricultural purposes within the meaning of the Act." The reference to the decision relating to coffee garden is to the decision in Kunhayen Haji v. Mayan [1894] ILR 17 98 . In Panadai Pathan v. Ramasami Chetti [1922] ILR 45 Mad. 710, Spencer and Ramesam, JJ., decided that the lease of land for growing casuarina trees was a lease for agricultural purpose within the meaning of Section 117 of the Transfer of Property Act. Both the learned Judges referred to the dictionary meaning of the word. Spencer, J., at page 713 stated his conclusion in these words: "In my opinion agriculture connotes the raising of useful or valuable products which derive nutriment from the soil with the aid of human skill and labour; and thus it will include horticulture, arboriculture and sylviculture in all cases where the growth of trees is effected by the expenditure of human care and attention in such operations as those of ploughing, sowing, planting, pruning, manuring, watering, protecting, etc." Ramesam, J., at page 714 was against placing a narrower interpretation upon the word for he says: "To give a narrower interpretation to the term and to confine it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of cases stresses upon the meaning of the word "cultivable" in the definition of "ryoti land". "Ryoti land" is defined as cultivable land and if the land according to the decision was not permanently cultivable but was fit only for pasturage it was not ryoti land within the meaning of the Act. A person who holds a land for pasturage cannot be said to hold the land for agricultural purpose under the Estates Land Act. The Act itself contains clear indications to this effect. Firstly, the fee payable for pasturage is included in the definition of "rent" and is not treated otherwise as part of rent. In the second place Section 6(2) enacts that if land is held under a contract for pasturage of cattle the tenant so holding the land would not acquire permanent rights of occupancy in the land and by reason of such letting the land, it does not become ryoti land. "Agriculture" is defined in the Act as including horticulture, which is an indication that the word is used in a narrower sense. It is for these reasons that those decisions held that the holding of a land 'for pasturage was not for agricultural purposes. These decisions, in m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in what was once British India but now the Indian Republic. When exemption from income-tax is sought under Section 4(3)(viii) of the Income-tax Act for "agricultural income", the primary condition must be satisfied that the land whose income is in question is used for agricultural purposes. The expression "such land" in Section 2(1)(b) refers back to the land mentioned in Section 2(1)(a) and must have the same quality, i.e., of being used for agricultural purposes. I shall briefly advert to the genesis of the provision exempting agricultural income derived from lands assessed to land revenue, as I consider that the subject-matter with which the legislature was dealing, and the facts existing at the time with respect to which the legislation was made, are legitimate topics for consideration in ascertaining the object and scope of the exemption from income-tax conferred on agricultural income. This exemption, it would be noticed, has been a persistent feature of the Income-tax legislation of this country from 1867 onwards, and nothing like it is found in the English Income Tax Acts. Even at a time when there was no provision like Section 100 of the Government o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eanings furnished either by way of definition or illustration in the enactments, and cases decided under other enactments have been freely drawn upon by the learned counsel in the course of their arguments in this case. I do not know that judicial attempts to define the expression "agriculture" or to draw the dividing line between what is. and what is not "agriculture" with reference to operations carried out on land have been very successful. But help in deciding the question before us may be obtained by examining the reported decisions as showing how in particular circumstances the dividing line has been drawn. There being no definition of "agriculture" and "agricultural purpose" in the Income-tax Act, the words have to be construed and understood in their popular sense and according to their ordinary meaning: Queen v. Income-tax Commissioner [1883] 22 QB 296, 309 affirmed on appeal in Commissioners for Special Purposes of Income Tax v. Pemsel [1891] AC 531, 545. Exemption from tax granted by a Statute should be given full scope and amplitude and should not be whittled down by importing limitations not inserted by the legislature: Associate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l or valuable products which derive nutriment from the soil with the aid of human skill and labour. It would include horticulture, which involves intensive cultivation of land as garden in the production of fruits, flowers or vegetables. It would also include growing of trees or plants whose growth is effected by the expenditure of human effort, skill and attention in such operations, as those of ploughing, sowing, planting, pruning, manuring, watering, protecting, etc. as held by Spencer, J., in Panadai Pathan v. Ramaswami Chetty [1922] ILR 45 Mad. 710, 712. The word "agriculture" applies to the cultivation of the soil for food products or any other useful or valuable growth of the field or garden and is wide enough to cover the rearing, feeding and management of livestock, which live on the land and draw their sustenance from the soil. In Mustafa Ali Khan v. Commissioner of Income-tax [1948] 16 ITR 330, the Judicial Committee approved of the decisions in Yuvarajah of Pithapuram v. Commissioner of Income-tax [1946] 14 ITR 92 and Benoy Ratan Banerji v. Commissioner of Income-tax [1947] 15 ITR 98 and held that income derived from the sale of trees described as "fores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or prodding of the soil at the inception when the planting is done and subsequently also at intervals. In the case of coffee grown on hill slopes, there is no ploughing or tillage as in the case of wet and dry fields; but it cannot be maintained that growing coffee is not an agricultural operation. Coffee and tea plants stand on the soil for many years, and their produce is gathered periodically. In the padugai lands or lands lying between the sandy bed and the flood bank of rivers, plantains are grown in many places in deltaic tracts. Young plants are often brought and planted in pits dug for the purpose in a row with sufficient interspaces. Trenches are dug by the side of a row of plantain trees in order to catch and retain water. The plantain tree lasts for about 2 years, and from each tree off-shoots spring up and grow in the place of the parent tree. There is thus a natural replenishment of the plantain garden. It cannot be said that the raising of plantains is not an agricultural purpose. Similarly in the case of sugarcane, the plants stand on the land for two years or a little more, and there are usually two cuttings. Castor plants stand for some years on the soil and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... road sense, farming, horticulture etc. It has now been held by the Judicial Committee that the word "agriculture" involves some measure of cultivation of the land or some expenditure of skill and labour upon it. The extent and intensity of the cultivation and the quantum of the effort and labour spent vary with varying soils and the plants or crops raised thereon, and no particular or fixed standard can be prescribed as applicable to all cases. As pointed out by Varadachariar, J., in Meghraj v. Allah Rakhia [1942] ILR 23 Lah. 623 where all the relevant earlier cases are reviewed, decisions turning on the interpretation of local Tenancy Acts are not of relevance in this connection. Both in Meghraj's case (supra) and in Sarojini Devi v. Krishna Anjaneya [1945] ILR 1945 Mad. 61 it was pointed out that the expression "agricultural land" in Lists II and III of Schedule VII of the Constitution Act, 1935, should receive a wide interpretation and that Parliament could not have intended that the particular circumstances under which cultivation was carried on or the nature of the produce raised on the land should determine the law which governed the devolution of the lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not a considered decision on the point, and even otherwise, I am unable to agree with it. I would hold that irrespective of the nature of the produce or product of the land, whatever is grown on land aided by human labour and effort, whatever does not grow wild or spontaneously on the soil, without human labour or effort, would be an agricultural product, and the process of producing it would be "agriculture" within the meaning of that expression in Section 2 of the Income-tax Act. In short, the word is used to denote the raising of valuable or useful products deriving nutriment or sustenance from the soil with the aid of human labour or skill. Having regard to. (1) the history of the relevant provision and the reason for the exemption of agricultural income from income-tax, (2) the more extended signification acquired by the word "agriculture" in modern usage and wider ambit of interpretation allowed by other taxing statutes, English and Indian, than the mere tilling or cultivation of an open field and (3) the unlikelihood of the legislature differentiating arbitrarily between different kinds of plants or crops grown on the same land for the purpose of exem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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