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TMI Blog1991 (9) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... inalised the assessment of the firm for the assessment year 1979-80, 60 per cent. of the income was taken as the income relating to agriculture within the meaning of the Tamil Nadu Agricultural Income-tax Act The Agricultural Income-tax Officer added to this the sale value of timber realised out of silver oak shade trees to the tune of Rs. 52,381. It is this turnover which is the subject-matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shade trees are grown for the purpose of giving protection to the tea plants and, therefore, such shade trees when cut and sold, the sale proceeds whereof would not amount to agricultural income. In State of Kerala v. Karimtharuvi Tea Estate Ltd. [1966] 60 ITR 275 (SC), the assessee had grown gravellia trees for the purpose of providing shade to the tea plants. When such trees were cut and so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the said judgments were not in any way contradictory or conflicting. The Division Bench laid down the ratio as follows (at page 402): " If such trees were grown by them for the purpose of deriving income therefrom, undoubtedly, they use such trees for agricultural purposes and so they used the land upon which such trees were grown by them for agricultural purposes. But, once it is found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome by felling and selling the same. The Tribunal has referred to the fact that, in the estate in question, shade trees had not been grown for the protection of the tea plants. Further, the agreement entered into between the assessee and the purchaser of the trees contained the clause as follows : "The entire standing gravellia trees in the tea fields consisting of silver oak trees to be sold an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly for the purpose of deriving income by cutting and selling the same at a later stage. Thus, the sale proceeds were found to be taxable under the Tamil Nadu Agricultural Income-tax Act. On such clear findings, the law as adumbrated in the Division Bench judgment in T. C. Nos. 720 to 722 of 1981 (see [1991] 191 ITR 397 (Mad)), makes the petitioner/assessee clearly liable to pay agricultural income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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