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TMI Blog1997 (1) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... tural Income-tax Officer found that a sum of Rs. 2,19,581, being the sale proceeds of blue gum and wattle trees had escaped assessment. He, therefore, initiated proceedings under section 35 of the Act. The Assessing Officer then determined the net agricultural income at Rs. 28,84,135 by adding the sale proceeds of the said trees. Aggrieved by the tax levied accordingly by the Agricultural Income-tax Officer, the assessee preferred an appeal to the Appellate Assistant Commissioner but there too, be failed. Then the assessee preferred a second appeal before the Tribunal. The Tribunal also concurred with the authorities below and dismissed the said appeal. Aggrieved, the assessee has preferred this revision. The above said trees were cut pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue reiterated the reasoning of the Tribunal and also pointed out that as per the decision of the Tribunal, there is no evidence to show that the abovesaid trees are of spontaneous growth and that the Tribunal also did not accept the argument of the assessee that the above said trees are shade trees. In our view, there is no necessity to directly consider the said rival arguments, in view of our following reasons in favour of the assessee. As per CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 : "'Agriculture' in its primary sense denotes the cultivation of the field and is restricted to cultivation of the land in the strict sense of the term, meaning thereby tilling of the land, sowing of the seeds, planting and similar operations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "agricultural income" can be levied only by the State leaving the "non-agricultural income" to be taxed by the Union. Article 336(1) of the Constitution of India defines "agricultural income" thus : "'Agricultural income' means agricultural income as defined for the purposes of the enactments relating to Indian income-tax :" While so, the Central Act, viz., the Income-tax Act, 1961, defines the term "agricultural income" under section 2(1) thereof. The definition found in the above said section 2(1) of the Income-tax Act, 1961, has to be adopted in construing the said term under the Constitution of India. Just as the definition in the Income-tax Act, 1961, there was also a similar definition of "agricultural income" in the old Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,64,554---under section 17(3) of the Act in this office GIR-51(k)/78-79/KIG, dated October 31, 1980. Subsequent scrutiny of the assessment records for the year 1978-79 reveals that a sum of Rs. 2,19,581 from sale of blue gum and wattle bark was treated as non-agricultural income. This has to be added to the 60 per cent. of income computed by the Income-tax Officer and taxed "under the Agricultural Income-tax Act, as this is an agricultural income. This is thus an escaped income." It is obvious that only in relation to the abovesaid rule 7 of the Tamil Nadu Agricultural Income-tax Rules, the Officer has referred to the abovesaid 60 per cent. of the income. The said rule runs as follows : "7. Computation of income from tea.---In respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me in relation to tea and not to the abovesaid trees, even though they might have been owned by the assessee, along with the tea plantation. So, rule 7 has no application at all in the present case. Thus, we find in the above reassessment notice there is absolutely no reference to the above referred to basic operations as explained by the Supreme Court. That apart, in the assessment order also, there is no finding at all regarding the existence of the abovereferred to basic operations in relation to those trees. In fact, in none of the orders of the authorities below including the Tribunal such a finding is there. Therefore, on this short ground, there is no justification for holding the abovesaid income as "agricultural income" in the li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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