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TMI Blog1952 (5) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... aking profit, there was a regular working plan and the assessee was deriving regular income from the forest and spending money to increase the profit. It was in view of these admissions that Shri Pathak had to concede that the answer to this question must be in the affirmative, i.e., that the net receipts on the sale of forest trees were the assessee's income liable to income-tax and were not merely capital converted into cash. Shri Pathak has, however, urged that this income must be treated as agricultural income within the meaning of Section 2(1)(a) of the Indian Income-tax Act and as such it is exempt from income-tax. As the question has been framed, the answer can only be in favour of the department. The assessee had prayed that the question be amended as follows :- "Whether the income from the sale of forest trees originally of spontaneous growth for the regeneration and preservation of which human labour and skill were used, growing on land, which is assessed to land revenue, is 'agricultural income' within the meaning of Section 2(1)(a) of the Income-tax Act and as such exempt from income-tax under Section 4(3)(viii) of the Act ?" When this applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator, or the receiver of the rent-in-kind, of any land with respect to which, or the produce of which, any operation mentioned in sub-clauses (ii) and (iii) of clause ( b) is carried on : Provided that the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator, or the receiver of the rent-in-kind by reason of, his connection with the land, requires as a dwelling house, or as a storehouse, or other out-building". It is not disputed that the land in this case is assessed to land revenue. The only question for decision is whether, in this case, the income can be said to be derived from land used for "agricultural purposes" by "agriculture" within the meaning of these words in Section 2(1)(b)( i) of the Indian Income-tax Act. It has not been and could not be contended that this income can be treated as agricultural income within any other clause of Section 2(1) of the Act. In the Statement of the Case, the Tribunal has mentioned that it was conceded befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the order of the Appellate Assistant Commissioner of Income-tax a part of the paper-book, we may look at that order also. However, even if that order is taken into consideration, it does not show that any actual watering of the trees was done by the assessee and it would appear that, at best, all that was done in expending skill and labour for the regeneration and preservation of the trees was pruning and weeding besides protecting of the trees. This process by itself is not enough to constitute "agriculture" or a regular operation in "forestry". Words "agriculture" and "agricultural purposes" with reference to land clearly imply that some operations must be carried on the soil of the land itself ; human skill and labour should be used for the purpose of ploughing the soil, manuring it, planting the trees or some similar process. Mere weeding, care and preservation of the trees which grow spontaneously are not operations on the soil of the land which are necessary to constitute the process a process of agriculture. In Maharaja of Kapurthala v. Commissioner of Income-tax, C.P. & U.P. [1945] 13 ITR 74, a Bench of the Chief Court of Oudh held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that must exist is that there should be "some measure of cultivation of the land" or "some expenditure of skill and labour upon it". The language used by their Lordships of the Privy Council shows that the expenditure of skill and labour must be upon the land and not merely on the trees which are already growing on it as a result of spontaneous growth. In the present case, mere regeneration and preservation of trees by human agency cannot be said to be expenditure of skill and labour upon the land itself. Clearly, therefore, it is not possible to hold that, in this case, the land was being used for agricultural purposes or that the process of agriculture was being carried on. Planned and scientific exploitation of a forest of spontaneous growth, though it might yield regular income, would not be income from "agriculture" as no operations are carried out and no human skill or labour is expended in such a case on the land itself. Learned counsel for the assessee has relied on a decision of the Calcutta High Court in Commissioner of Agricultural Income-tax, West Bengal v. Raja Jagadish Chandra Deo Dhabal Deb [1949] 17 ITR 426, where the Bench expressed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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". Emphasis was laid on two aspects. The crop should be grown on land aided by human labour and effort and further it should not grow wild or spontaneously on the soil without human labour or effort. In the case before us, the trees have been held to be of spontaneous growth an-1 it is not shown that human labour or effort was utilised in aiding the growth of the trees. Finally, the learned counsel for the assessees also relied on a decision of the Assam High Court in Jyotirindra Narayan Sinha Choudhury and Others v. The Stale of Assam [1951] 19 ITR 379 . That case is of no assistance because, in that case, the decision proceeded on the finding that the forest trees, as they existed at the time when the question of assessment of the income from those trees arose, were the result of operations in forestry that were undertaken for their growth and regeneration and were not the original trees of spontaneous growth. It was also found to be an admitted fact that the forest tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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