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TMI Blog1971 (12) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... vandrum town for Rs. 34,500, including registration expenses. The property was a garden land and had two wells and a tank : it had also facilities of electricity and tap water. The property had over 300 coconut trees, a few jack trees and other fruit-bearing trees thereon : it had also some sandalwood trees and flowering plants like jasmin. The Maharajah used to drive to the Singarathope during the evenings and spend some time there. On 23rd January, 1957, Kolappa Pillai made a settlement of the property on the assessee and his younger brother, the former getting 2 out of 3 shares and the latter getting the remaining third share. The same year the Government of Kerala initiated proceedings for acquiring the property for providing house sites for Harijans. In the acquisition the assessee and his brother got Rs. 2,90,653 as compensation, the matter, ultimately, having been disposed of by the High Court in February, 1961. The assessee claimed that he expended Rs. 5,000 on the property subsequent to the settlement. However, the department allowed the claim only to the extent of Rs. 3,400 so that the total cost of the asset (the property) came to Rs. 37,900. Deducting this amount from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer, Ernakulam. The reasoning of the Tribunal, on the other hand was that the fruit-bearing trees like coconut trees, jack trees, etc., not have been of spontaneous growth, nor was there any evidence that they were of spontaneous growth ; that the Maharajah must have planted them, nurtured them and tended them ; that there was evidence that the Maharajah used to auction the usufructs of the trees annually and collect the income that the Maharajah also used to pay land revenue for the property ; that the property was, therefore, agricultural land in the hands of the Maharaja ; that the purchase by Kolappa Pillai in 1956, paying a low price, which worked out only to less than Rs. 40 per cent was also an agricultural and that, the after, unless there was some act on the part of the assessee to convert the land into non-agricultural land, the property should remain agricultural land as it originally was. The Tribunal also pointed out that there was no evidence to show that the assessee after this purchase from the Maharajah, converted the land into non-agricultural land. Though the term " agricultural income " is defined in the Income-tax Act (article 366(1) of the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultivation of the soil--there is no agriculture. Yet another decision on the question is again of the Supreme Court in Commissioner of Income-tax v. Ramakrishna Deo. In addition to discussing the nature of agriculture, this decision has laid down that it is, for a person who claims exemption from tax to establish it : in other words, where an assessee claims exemption from income-tax, it is for him to prove that the income from the forest was agricultural income and it is not for the department to prove that the forest income was chargeable to tax. Venkatarama Aiyar J., who wrote the judgment in this case, has observed that, in order to decide whether the income derived by an assessee by the sale of trees in his forests was agricultural income or not, the crucial question is whether the trees were planted by the assessee or whether they grew spontaneously ; and that, if it is the latter, it would be immaterial that the assessee has maintained a large establishment for the purpose of preserving the forests and assisting in the growth of the trees, because, ex hypothesi, he performed no basic operations for bringing the forests into being. We may also refer, in this connection, to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where land has been admittedly put to agricultural use till a day or a month or a few months before the valuation date, the land would not cease to be agricultural merely because it does not happen to be under the plough on the valuation date ; that, particularly, in a case where it is admitted or proved that the land in dispute was agricultural land for a long time, till about a few years before the valuation date, it would be presumed to remain as agricultural laud unless something definite has in the meantime happened to make it non-agricultural ; and that, till the user of the land is actually changed or other definite indications to the contrary are available in a given case, it is only safe to presume that a property would normally continue to be put to the use to which it has been put all along for a long time. Yet another decision on this aspect is the decision of the Gujarat High Court in Rasikhlal Chimanlal Nagri v. Commissioner of Wealth-tax. The learned judges have observed that the true test to be applied for the purpose of determining whether a particular land is agricultural land or not, in a case where the land is not being actually put to any use, is not whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee to convert it into, housing sites. Therefore, the conclusion should be that the property remained agricultural land. And, lastly, a word about the decision in Krishna Iyer's case which we have already referred to at the commencement of the judgment. In that case, a property having an extent of 57 cents in a very important locality in Ernakulam town was purchased by the assessee at Rs. 1,180 per cent. During the relevant time (1959), even the best coconut garden in the most fertile arms in the State would not have fetched even Rs. 150 per cent. The property had 12 coconut palms 17 arecanut palms, 2 mango trees and 5 other trees and also a building. The building was fetching a rent of Rs. 50 per month ; and it was not possible to find out how much was being derived as income from the coconut and other trees. In those circumstances a Division Bench of this court held that the land was not agricultural land. It is clear that, even at the time of purchase of the land by Krishna Iyer, the land was not agricultural land, because he paid Rs. 1,180 per cent which was about seven or eight times the value of the best agricultural land at the time. Therefore, on the basis of this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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