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TMI Blog2004 (5) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... an agricultural activity - We find no illegality in the order of the Tribunal – Assessee’s appeals are dismissed. - - - - - Dated:- 19-5-2004 - Judge(s) : M. KATJU., R. S. TRIPATHI. JUDGMENT These three income-tax appeals involve common questions of law and fact and hence are being disposed of by a common judgment. Heard learned counsel for the parties. The assessee owns a plant nursery where he grows ornamental and decorative plants which he sells and derives income therefrom. The assessee alleges that this is agricultural income as he performs agricultural operation. He has relied on the Supreme Court decision in CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466. However, the assessing authority did not accept the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e us is whether the assessee's income is agricultural income. The Tribunal has referred to the decision of this court in H. H. Maharaja Vibhuti Narain Singh v. State of Uttar Pradesh [1967] 65 ITR 364 and held that the nurseries are maintained and run as a business quite independently of agriculture, and hence the income is not agricultural income. In that decision this court held that even if keeping of a nursery necessarily involves the use of some land and earth for the purposes of rearing plants, that would not by itself amount to the carrying on of a primary agricultural operation in the sense of cultivation of the soil. Section 10(1) of the Income-tax Act states that agricultural income shall not be included in the total income of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Privy Council in Raja Mustafa Ali Khan v. CIT [1948] 16 ITR 330 in the year 1948 and culminating in the decision of the High Court of Orissa in Vikram Deo Varma, Maharaja of jeypore v. CIT [1956] 29 ITR 76 in the year 1956, since reversed by the Supreme Court in CIT v. Ramakrishna Deo [1959] 35 ITR 312. The divergence centred principally around three problems: (i) Whether the human labour and skill, involved in agricultural operation should be spent on the land, or they could be spent on the plant or the tree or the crop, after it has sprouted; (ii) Whether the concept of "agriculture" carried it in the nature of the product raised, viz., of its being fit for consumption by man or by beast; and (iii) Whether such operation would incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs, preservation of the crop from insects and pests and from depredation by cattle, tending, pruning, cutting, etc. Both the basic and the subsequent operations together form the integrated activity of the agriculturist. The performance of the subsequent operations on the products of the land would not be enough to invest the subsequent operations with agricultural character. They should be in conjunction with, and in continuation of, the basic operation which is the sine qua non of an agricultural operation. Without it, the subsequent operations do not acquire the character of agricultural operations. It may be mentioned that the nature of the produce raised has no relevance to the character of agricultural operation. Accordingly, "a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as, cotton, indigo, jute, hemp, linen, rubber, tobacco, groundnuts, castor seeds, tendu leaves and horra nuts; (iv) housing value such as, bamboo, timber vide CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 (SC) and palmyra vide CIT v. K. E. Sundara Mudaliar [1950] 18 ITR 259 (Mad); (v) fuel value, such as, casuarina vide CIT v. K. E. Sundara Mudaliar [1950] 18 ITR 259 (Mad); Pavadai Pathan v. Ramaswami Chetty, AIR 1922 Mad 351; Chandramani Patta Mahadevi v. Municipal Council [1945] 2 MLJ 315 ; AIR 1946 Mad 143, (vi) medicinal and health value such as, cardamoms vide S. K. Kadirvelsami Naicker v. S. P. Sultan Ahmed Badruddin Rowther, AIR 1947 Mad 160, arecanuts and betel and the whole gamut of oshadhis ; and (vii) all things edible o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Soundarya Nursery [2000] 241 ITR 530. In further appeal, the Tribunal has held vide paragraphs 19 and 20 of its order that the Assessing Officer should bring on record the nature of the operations, viz., primary as well as secondary on the specific land area, and thereafter apply the law laid down in the above cases to the facts of the present case. He has observed that the Assessing Officer has to examine how the assessee can be said to be carrying on agriculture in the primary sense, i.e., tilling of the land, sowing of seeds and planting and doing other operations on the land. After examining this aspect, the Assessing Officer has to examine the secondary operation carried out by the assessee. Mere performing of the secondary operati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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