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TMI Blog1957 (5) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... ment for 1944-45 also was first made without including therein any forest income, but the assessment was subsequently re-opened under section 34. In response to a notice under section 22(2) read with section 34 of the Act, the respondent submitted a return showing the gross receipt of Rs. 51,798 from the said forest. A claim was, however, made that the said income was not assessable under the Act as it was agricultural income and was exempt under section 4(3)(viii) of the Act. The Income-tax Officer rejected this claim and added a sum of Rs. 34,430 to the assessable income as income derived from the forest after allowing a sum of Rs. 17,548 as expenditure. 3. The Appellate Assistant Commissioner confirmed the assessment and the Income-tax Appellate Tribunal also was of opinion that the said income was not agricultural income but was income derived from the sale of jungle produce of spontaneous growth and as such was not covered by section 2(1) of the Act. At the instance of the assessee the Tribunal referred to the High Court under section 66(1) of the Act two questions of law arising out of its order, one of which was : "Whether on the facts and in the circumstances of this ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that arises for consideration in this appeal is whether income derived from the sale of sal and piyasal trees in the forest owned by the assessee which was originally a forest of spontaneous growth "not grown by the aid of human skill and labour" but on which forestry operations described in the statement of case had been carried on by the assessee involving considerable amount of expenditure of human skill and labour is agricultural income within the meaning of Section 2(1) and as such exempt from payment of tax under section 4(3)(viii) of the Indian Income-tax Act. 7. Section 2(1) of the Act defines agricultural income and states (so far as it is relevant for the purposes of this appeal) : "(1) 'agricultural income' means-- (a) any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land revenue in the taxable territories or subject to a local rate assessed and collected by officers of the Government as such ; (b) any income derived from such land by-- (i) agriculture, or (ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-ki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dia Act, 1935, no such demarcation existed in the Devolution Rules made under the Government of India Act, 1919, and in any event the definition of agricultural income with which we are concerned was incorporated in the Indian Income-tax Acts as early as 1886, if not earlier ; vide section 5 of the Indian Income-tax Act, 1886 (II of 1886). It has also to be remembered that in spite of this demarcation between agriculture and forests in the Constitution, taxes on agricultural income are a separate head under entry 46 of List II of the Seventh Schedule and would comprise within their scope even income from forestry operations provided it falls within the definition of agricultural income which according to the definition given under article 366 (1) means agricultural income as defined for the purposes of the enactments relating to Indian income-tax. 11. The terms "agriculture" and "agricultural purpose" not having been defined in the Indian Income-tax Act, we must necessarily fall back upon the general sense in which they have been understood in common parlance. "Agriculture" in its root sense means ager, a field, and culture, cultivation, cultivation of a field which of course impl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anagement of live-stock ; tillage, husbandry and farming. In its general sense the word also includes gardening or horticulture." 15. Bhashyam Ayyangar J., in Murugesa Chetti v. Chinnathambi Gounden and Others gave the following dictionary meanings of agriculture as culled out from the Century Dictionary and Anderson's Dictionary of Law : "The primary meaning of agriculture is the cultivation of the ground ('The Century Dictionary') and in its general sense, it is the cultivation of the ground for the purpose of procuring vegetables and fruits for the use of man and beast including gardening or horticulture and the raising or feeding of cattle and other stock (Anderson's 'Dictionary of Law'). Its less general and more ordinary signification is the cultivation with the plough and in large areas in order to raise food for man and beast ('The Century Dictionary') or, in other words, 'that species of cultivation which is intended to raise grain and other field crops for man and beast.' (Anderson's 'Dictionary of Law'). Horticulture, which denotes the cultivation of garden or orchards, is a species of agriculture in its primary and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese also be not classed as agricultural operations. 19. Considerable stress was laid on the fact that section 4(3)(viii) of the Act enacted a provision in regard to the exemption of "agricultural income" from assessment and it was contended that exemptions should be liberally construed. Reliance was placed on the observations of Viswanatha Sastri, J., in Commissioner of Income-tax, Madras v. K. E. Sundara Mudaliar and Others : "Exemption from tax granted by a statute should be given full scope and amplitude and should not be whittled down by importing limitations not inserted by the Legislature." 20. Mookerjee, J., in Commissioner of Agricultural Income-tax, West Bengal v. Raja Jagadish Chandra Deo Dhabal Deb also expressed himself similarly "and the present-day view seems to be that where an exemption is conferred by statute, that clause has to be interpreted liberally and in favour of the assessee but must always be without any violence to the language used. The rule must be construed together with the exempting provisions, which must be regarded as paramount." 21. He also quoted a passage from Upper India Chamber of Commerce v. Commissioner of Income-tax, C.P. & U.P. "It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of farming, caring for, or cultivating forests ; the management of growing timber." 26. Webster's New International Dictionary, Vol. I, page 643, while talking of cultivation, says that "to cultivate" means "(1) to prepare, or to prepare and use, for the raising of crops ; to till ; as, to cultivate the soil ; to loosen or break up the soil about (growing crop or plants) for the purpose of killing weeds, etc., especially with a cultivator, as to cultivate the corn ; (2) to raise, or foster the growth of, by tillage or by labour and care; to produce by culture ; as to cultivate roses ; to cultivate oysters." 27. Whether the narrower or the wider sense of the term "agriculture" should be adopted in a particular case depends not only upon the provisions of the various statutes in which the same occurs but also upon the facts and circumstances of each case. The definition of the term in one statute does not afford a guide to the construction of the same term in another statute and the sense in which the term has been understood in the several statutes does not necessarily throw any light on the manner in which the term should be understood generally. The decided cases disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition and it may be noted that Shephard, J., who was a party to this decision stated in the later case of Murugesa Chetty v. Chinnathambi Gounden that he was wrong in the opinion he expressed with regard to a coffee garden in this case. 29. Murugesa Chetty v. Chinnathambi Goundan also was concerned with section 117 of the Transfer of Property Act. The lease there was a lease of land for the cultivation of betel and the Court held that such a lease was an agricultural lease falling under section 117. Bhashyam Ayyangar, J., who delivered the main judgment of the Court discussed the dictionary meanings of the term "agriculture" and stated that in section 117 of the Transfer of Property Act it was used in its more general sense as comprehending the raising of vegetables, fruits and other garden products as food for men or beast, though some of them may be regarded in England as products of horticulture as distinguished from agriculture. The learned Judge considered the distinction between "agriculture" and "horticulture" and observed : "The distinction between agriculture when it is used otherwise than in its primary and more general sense and horticulture is a fine one even in En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t "ryoti" land inasmuch as it was not fit for ploughing and raising agricultural crops. The ordinary meaning of "agriculture" was taken to be "the raising of annual or periodical grain crops through the operations of ploughing, sowing, etc." (Per Sadasiva Ayyar, J., at p. 741). 32. Chief Commissioner of Income-tax, Madras v. Zamindar of Singampatti was a reference arising out of the assessment for income-tax under Act VII of 1918 of the income derived by the Zamindar of Singampatti from forests and fisheries within the ambit of his Zamindari. The assessee objected to the assessment (i) on the ground that the income was agricultural income within the meaning of section 4 of the Act and, therefore, not chargeable to income-tax; (ii) that the assessment was illegal as contravening the terms of his permanent sanad for the Zamindari and the provisions of Regulation XXV of 1802. The Court held that where the peishkush of a permanently settled estate was fixed in commutation not only of the rentals of the cultivated lands but also of all income which might be derived from forests or fisheries, both under the terms of the sanad and section 1 of Regulation XXV of 1802, these incomes were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income from pasturage". The income from the first two heads was certainly not agricultural income or income derived from "land which is used for agricultural purposes" within the meaning of sections 2 and 4 of the Act. But income derived from pasturage was held to be agricultural income which could not lawfully be charged with income-tax. There was a difference of opinion between Rankin, J., and Page, J., in regard to the liability of income from fisheries and income from land used for stacking timber based on the construction of the Permanent Settlement Regulations of 1793. But that is immaterial for our present purposes. What is material is that both the learned judges were unanimous in their opinion that income from pasturage was income derived from "land which is used for agricultural purposes" and was therefore within the exemption given by section 4(3)(viii) to agricultural income as defined by section 2(i)(a) of the Act. 36. In Kesho Prasad Singh v. Sheo Pragash Ojha the Privy Council held that a grove was not land "held for agricultural purposes" within the meaning of section 70 of the Agra Tenancy Act, 1901, affirming the decision of the High Court of Allahabad that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlance an agriculturist. If we take the strict meaning of 'agriculture' according to its derivation it means the cultivation of a field, the cultivation of an open space, as opposed to horticulture, the cultivation of a compartively small enclosed space. The cultivation either of the field in agriculture or of the garden in horticulture cannot be confined, I think, to any particular product. With great respect, I do not agree with the opinion of Bhashyam Ayyangar, J., in Murugesa Chetti v. Chinnathambi Goundan that agriculture implies production of things useful as food for man or beast or other products fit for human consumption by way of luxury. That appears to me to be too narrow an interpretation. Still less do I agree with the opinion expressed by Sadasiva Ayyar, J., in Raja of Venkatagiri v. Ayyappa Reddi that agriculture is confined to the production of grain crops. I can see no reason why the cultivation in open space of such useful products as cotton, jute, flax and hemp should not be agriculture. Indeed I think agriculture cannot be defined by the nature of the products cultivated, but should be defined rather by the circumstances in which the cultivation is carri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hesitated to include therein growing of trees in plantation where the land was covered with trees which have to stand on it for a number of years. 41. The last case to be referred in this series is that of Deen Mohammad Mian v. Hulas Narain Singh where it was held that an orchard is an agricultural land. It was observed : "The case of an orchard is quite different. Orchard trees ordinarily are, and can be presumed to have been, planted by man after preparation of the ground which is cultivation and seasonal crops are gathered. Fruit trees also require seasonal attention such as pruning and digging of the soil around the roots, and it cannot be said that this ceases to be cultivation merely because the whole tree is not replanted every year.....................In my opinion the land in suit is agricultural land; it is land from which by preparing the soil and planting and cultivating trees the raiyat expects to enjoy periodical returns in the way of produce for food." 42. This was a further extension of the idea which had germinated in the opinion expressed by Reilly, J., in Chandrasekhara Bharathi Swamigal v. Duraisami Naidu and even plantation of trees in orchards which di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with a spade and small earthen ridges are put up so as to catch and retain rain water. Bamboo plants attain maturity in about 3 or 4 years, and the thorny branches which grow on the main stem are then fit to be cut off and used for fencing purposes........................I am unable to see why these operations are not agricultural operations." 44. The cases above noted all of them interpret the term "agriculture" in its narrower sense, though there is a marked progress from the extremely narrow construction put upon it by Bhashyam Ayyangar, J., in Murugesa Chetti v. Chinnathambi Goundan to the somewhat wider connotation thereof adopted by Reilly, J., in Chandrasekhara Bharathi Swamigal v. Duraisami Naidu and by Viswanatha Sastri, J., in Commissioner of Income-tax, Madras v. Sundara Mudaliar. It is interesting to note that all throughout these cases runs the central idea of either tillage of the land or sowing of seeds or planting or similar work on the land which invests the operation with the characteristic of agricultural operations and whenever that central idea is fulfilled there is the user of land for agricultural purposes and the income derived therefrom becomes agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds or lands used for "rearing livestock", we should certainly decide that they were lands used solely for agricultural purposes." 46. The learned Judges there were influenced by the dictionary meaning of the term agriculture as given in Murray's New Oxford Dictionary and understood the term agriculture in the wider sense as including user of land for rearing live-stock also. 47. In Panadai Pathan v. Ramaswami Chetti a lease of land was given for growing casuarina trees and the question was whether such a lease was a lease for agricultural purposes within the meaning of section 117 of the Transfer of Property Act. The Court held that it was a lease for agricultural purposes and therefore did not require a registered instrument for its creation. Spencer, J., in the course of his judgment differed from the opinion of Bhashyam Ayyar, J., in Murugesa Chetty v. Chinnathambi Goundan that the word agriculture in its more general sense comprehends the raising of vegetables, fruits and other garden products as food for man or beast, if the learned Judge intended thereby to limit it to the raising of food products. For to so restrict the word would be to exclude flower, indigo, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Where cattle are wholly stall-fed and not pastured upon the land at all, doubtless it is trade and no agricultural operation is being carried on : where cattle are being exclusively or mainly pastured and are none the less fed with small amounts of oil-cake or the like, it may well be that the income derived from the sale of their milk is agricultural income. But between the two extremes there must be a number of varying degrees, and the task for the Income-tax Officer is to apply his mind to the two distinctions and to decide in any particular case on which side of the fence, if I may use the term, the matter falls." 51. He then referred to the case of Lean and Dickinson v. Ball where Lord Cullen had said that he proceeded on the footing that the case, which was one dealing with poultry-farming, was one in which the poultry derived sustenance to a material extent from the produce of the ground. 52. This method of approach was on a par with the one adopted by Lord Wright in Lord Glanely v. Wightman where it was observed : "If authority were needed, the provisions just quoted do at least show that profits of 'occupation' include gains from the animal produce as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch plants and the work done by the assessees consisted in pruning the trees and burning the dead branches and dried leaves lying on the ground., The Court held that the profits accruing to the assessees by the sale of tendu leaves was not exempt as agricultural income but to the extent to which pruning of the tendu shrub occurred, there was in a technical and legal sense a cultivation of the soil in which the shrub grew and, therefore, so much of the income as was shown by the assessee to be profit derived from the collection and preparation, so as to make them fit to be taken to the market, of tendu leaves produced by the pruning of the tendu shrubs was exempt as agricultural income under section 2(1) and section 4(3)(viii) of the Indian Income-tax Act, The learned Chief Justice observed : "Cutting back or pruning the wild tendu clearly contributes to the growth of the leaves in that shrub and I am prepared to hold that the pruning of the shrub is a cultivation of the shrub and as the shrub grows in the soil and as a part of it, is a cultivation of the soil in a legal and technical sense." 55. The word "cultivation" was here understood by the learned Chief Justice not only in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income" as given in section 2(1)(a) of the Indian Income-tax Act. 58. The cases above noted all of them involve some expenditure of human skill and labour either on the land or the produce of the land, for without such expenditure there would be no question of the income derived from such land being agricultural income. Where, however, the products of the land are of wild or spontaneous growth involving no expenditure of human labour and skill there is unanimity of opinion that no agricultural operations were at all involved and there is no agricultural income. In such cases, it would be the absence of any such operations rather than the performance thereof which would be the prime cause of growth of such products. 59. The cases bearing on this aspect of the question may be noted. 60. Kaju Mal v. Salig Ram is the earliest case where a stretch of natural forest came in for consideration. It was a forest land and it was held to be agricultural land or land used for purposes subservient to agriculture or for pasture, and, therefore, exempt from pre-emption under section 4 of the Punjab Pre-emption Act, 1905. 61. There was no discussion of any legal principles in that decision but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act. The Court followed an earlier decision given by it in the case of Maharaja of Kapurthala v. Commissioner of Income-tax, C.P. & U.P., in which the Court had discussed the meaning to be ascribed to the term " agriculture " and observed at page 93 : "A fiscal statute should no doubt be construed strictly and, if there be any doubt about its construction, the subject must be given the benefit. But we do not feel any doubt that the expression 'land used for agricultural purposes' in the Income-tax Act does not extend to forests of spontaneous growth, where nothing is done to prepare the soil for trees to be planted therein, and where the growth of the trees is not fostered by tillage. We should not be justified in giving the tax-payer the benefit of the dictionary definition when it is not disputed that the meaning of the term 'agricultural' cannot be extended for the purpose of the Income-tax Act to all the secondary implications therein suggested. We therefore construe the term in its primary sense. We hold accordingly that income from the sale of forest trees of, spontaneous growth growing on land which is assessed to land revenue is not agricultural income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h he sold were of spontaneous growth, not having grown as a result of actual cultivation. The Court held that in order to come within the definition of "agricultural income" the income had not only to be derived from land which was used for "agricultural purposes " but such income had also to be derived by the process of "agriculture". The Court observed that being trees of spontaneous growth, to the production of which the assessee had made no contribution by way of cultivation, no question could arise either of the land on which they grew being "used for agricultural purposes " or of the trees themselves and the income they produced being the result of "agriculture". The Court accordingly held that the income from the sale of forest trees of spontaneous growth, growing on land naturally, and without the intervention of human agency, was not agricultural income within the meaning of section 2(1)(a) of the Income-tax Act even if such land was subject to a local rate assessed and collected by officers of the Crown as such and such income was not exempt from income-tax under section 4(3)(viii) of the Act. 65. A decision of the Nagpur High Court in Bechar Singh Raghubir Singh v. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income and was not exempt from taxation under section 4(3)(viii) of the Indian Income-tax Act. 67. We now come to the decision of the Privy Council in Raja Mustafa Ali Khan v. Commissioner of Income-tax, U. P., Ajmer and Ajmer Merwara. It will be recalled that the Oudh Chief Court had in Raja Mustafa Ali Khan v. Commissioner of Income-tax, U.P. & C.P., decided that income from the sale of forest trees growing on land naturally and without the intervention of human agency even if the land was assessed to land revenue was not agricultural income within the meaning of section 2(1)(a) of the Indian Income-tax Act. The appellant took an appeal to the Privy Council against this decision and the main question for consideration before their Lordships was whether the land was used for agricultural purposes and the income derived therefrom was agricultural income. Their Lordships of the Privy Council observed that the income in question "was derived from the sale of trees described as forest trees growing on land naturally and the case has throughout proceeded upon the footing that there was nothing to show that the assessee was carrying on any regular operations in forestry and that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a difference to the result. Their Lordships also did not express any opinion on the question whether land can be said to be used for agricultural purposes within the section if it has been planted with trees and cultivated in the regular course of arboriculture. They were, however, definite in their opinion that unless there is some measure of cultivation of the land, some expenditure of skill and labour upon it, the land cannot be said to be used for agricultural purposes within the meaning of the Act. Agricultural operations are thus defined by them to be operations where there was some measure of cultivation of the land, some expenditure of skill and labour upon it. If these conditions were satisfied in regard to any particular land, then such land can be said to be used for agricultural purposes and the income derived therefrom constitute agricultural income within the meaning of section 2(1)(a) of the Act. The term "agriculture" for the purposes of the Indian Income-tax Act was thus in effect defined by their Lordships to mean some measure of cultivation of the land and some expenditure of skill and labour upon it and unless the operations, whether they be agricultural oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tle and men off from the lands so that they may not damage the young growing shoots. In order to promote the growth of shoots, the ground was also kept free from undergrowth jungle. This was not cleared at the assessee's expense but the villagers were allowed to clear the grounds of the undergrowth and take the same away free of cost. The existing sal trees in the forests and the sal trees which had been sold off in 1350 B.S. had been grown in the same manner as described above. From the above facts it was clear that human care and skill had been utilised for promoting the growth of the sal trees from which the income was derived in 1350 B.S. 71. The Court discussed the dictionary meaning of the term "agriculture" and following the decision of the Privy Council in Raja Mustafa Ali Khan v. Commissioner of Income-tax, U.P., Ajmer & Ajmer Merwara came to the conclusion that income from a virgin forest or forests of spontaneous growth was not agricultural income. The view that the tilling of the soil was the sine qua non for bringing a pursuit within the term agriculture was also held to have been exploded and it was observed : "Whether a particular forest is one of spontaneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." 74. The Court, therefore, came to the conclusion that in the special circumstances as disclosed in the case, there were regular operations in forestry and the income derived from forests in question was agricultural income within the meaning of section 2(1)(a) of the Bengal Agricultural Income-tax Act, 1944. 75. Jyotirindra Narayan Sinha Choudhury v. State of Assam arose under the Assam Agricultural Income-tax Act, 1939, and the question for the consideration of the Court was whether the amounts realised by the assessee from the sale of sal trees growing in the forest was agricultural income within the meaning of section 2(1) of the Act. There was no evidence to show that these sal trees were of spontaneous growth. Even though the possibility of the forests originally having been of spontaneous growth was recognised, it was an admitted fact that forest trees were protected and fostered in growth by the application of human labour and skill. In these forests, operations in forestry, such as clearing jungles, creepers and climbers, thinning by removal of less healthy trees from thickly grown areas, removal of unsound, crooked and diseased trees, burning of leaves to fertilise t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Where, therefore, such operations take place, the income from the sale of trees in the forest would be within the ambit of agricultural income as defined in the Assam Act." 78. In Pratap Singh Balbeer Singh v. Commissioner of Income-tax, U.P., C.P. & Berar, however, the High Court of Allahabad struck a different note. The assessee there derived the income from the sale of forest trees growing on land naturally and spontaneously without the intervention of any human agency but carried on forestry operations working the forest for at least some time on scientific lines in accordance with a scheme of making profits. There was a regular working plan and the assessee was deriving regular income from the forest and spending money to increase the profit. The Court held that "agriculture" and "agricultural purposes" with reference to land clearly implied that some operations must be carried on the land itself ; human skill and labour should be used for the purpose of ploughing the land, manuring it, planting the trees or some similar process, and that mere weeding, care and preservation of forest trees which grew spontaneously were not operations on the land which were necessary to const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The decision of the Privy Council in Raja Mustafa Ali Khan v. Commissioner of Income-tax, U.P., Ajmer, and Ajmer-Merwara, was considered and the Court observed at page 87 : "I do not think that when the Privy Council said that there must be 'some measure of cultivation on the land, some expenditure of skill and labour upon it', their Lordships intended to say that the expenditure of skill and labour must always be in the form of cultivation. The word 'or' introduced by the Allahabad High Court between the two phrases does not occur in the original, but I think it is implied. The idea, it seems to me, is that if the land has been left to the forces of nature to grow what products such forces could, there is no agriculture and that there can be agriculture only if the labour and skill of man has operated on the land to cause or aid the growth of certain products. All that is necessary is that the land should be actively exploited with a view to procuring growths or better growths from the soil but it does not seem to be also necessary that the exploitation should be by tillage." 81. The Court accordingly came to the conclusion that even though tillage was thus no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there was any expenditure of skill and labour upon the land and therefore the income from the sale of forest trees was not agricultural income. 83. In Jyotikana Choudhurani v. Commissioner of Income-tax, Assam which is also under appeal before us in Civil Appeals Nos. 57 to 62, a Special Bench of the Assam High Court considered whether income derived by the assessees from the sale of trees of spontaneous growth where there was no planting or sowing or employment of any human agency for the purpose of tilling the land but operations in forestry were carried on by the assessee involving considerable expenditure of human skill and labour was agricultural income within the meaning of section 2(1)(a) of the Indian Income-tax Act. The majority of the Court consisting of Sarjoo Prasad, C.J., and Ram Labhaya, J., (Deka, J., dissenting) held that even though there was no tilling of the land or planting of seed or saplings and the trees were of spontaneous germination, the operations carried on by the assessees were conducive to the growth and development of the trees and in essence involved the expenditure of human skill and labour on the land itself. Those operations were "agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e absence of operations in forestry in Raja Mustafa Ali Khan's case, when interpreting the test laid down therein. " 86. Vikram Deo Varma v. Commissioner of Income-tax, Bihar & Orissa, is the last case of this series. The assessee derived income from extensive forest areas in the impartible estate of which he was proprietor. Over several decades the whole of the forest area had been subjected by hill tribes to a process of "podu" cultivation--setting fire to the trees and cultivating the forest lands and raising crops thereon--so that it was impossible to say that there was any virgin forest left. Through a huge forest establishment considerable amount of human labour and skill was spent (i) in fostering the growth of trees and preserving them from destruction by men and cattle ; (ii) in cultivation of the soil by felling and burning trees from time to time ; (iii) in planned exploitation of trees by marking out the areas into blocks ; (iv) in systematic cutting down of trees of particular girth and at particular heights ; (v) in planting new trees where patches occur ; and (vi) watering, pruning, dibbling and digging. The Tribunal had held that as there was no forest cultiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rowth to be removed by people of the locality. There was no breaking up of the soil, no sowing or planting or watering or fencing. Whether the decision is correct or not can only be authoritatively declared by the Supreme Court of India. It seems to rest on an undue extension of the principle laid down by the Judicial Committee in Raja Mustafa Ali Khan's case, and goes much further than our decision in the present case." 88. It appears from the above survey that there has been a divergence of opinion amongst the various Courts not only in regard to the connotation of the terms "agriculture" and "agricultural purposes" but also in regard to the nature of forestry operations performed in the forest which can be styled agricultural operations so as to constitute the "land used for agricultural purposes" within the definition of agricultural income as given both in the Indian Income-tax Act and in the several Agricultural Income-tax Acts passed by the various States. 89. It may be noted at the outset that the definition of "agricultural income" given in section 2(1) of the Indian Income-tax Act is in identical terms with the definitions of that term as given in the various Agricu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessed to land revenue as understood by the Courts. Viswanatha Sastri, J., in this context observed in Commissioner of Income-tax, Madras v. Sundara Mudaliar at page 270 : "I shall briefly advert to the genesis of the provision exempting agricultural income derived from lands assessed to land revenue, as I consider that the subject-matter with which the legislature was dealing, and the facts existing at the time with respect to which the legislation was made, are legitimate topics for consideration in ascertaining the object and scope of the exemption from income-tax conferred on agricultural income. This exemption, it would be noticed, has been a persistent feature of the income-tax legislation of this country from 1867 onwards, and nothing like it is found in the English Income Tax Acts. Even at a time when there was no provision like section 100 of the Government of India Act, 1935, with Federal and Provincial Lists and there was no incompetency on the part of the Central Legislature to levy a tax on agricultural income, the Income-tax Acts passed from time to time by the Central Legislature including the existing Act of 1922, exempted from income-tax the agricultural income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tates, but there is no agreement as to what that practice--if there be a practice--has been. Assuming that it would have been open to us to place some degree of reliance upon an interpretation settled by practice as contemporanea expositio we are in fact without any such assistance." "Some reference was also made to what has been called a 'presumption against double taxation'. In Manindra Chandra Nandi v. Secretary of State, royalties from a coal mine were held liable both to cess under the Cess Act, 1880, and to income-tax under the Act of 1886, but it was said that, 'it may be conceded that Courts always look with disfavour upon double taxation, and statutes will be construed, if possible, to avoid double taxes.' Reference was made to certain dicta of American Courts and to the English case of Carr v. Fowle. But the only observation in this case was to the effect that the statute presumably did not intend that a vicar should in effect pay the same tax (land tax) twice on the same hereditament. This is plain enough. Thus the income-tax is one tax, and income assessed under one schedule cannot be assessed all over again under another. That there is any legal presu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uning, cutting, harvesting, and rendering the produce fit for the market. The latter would all be agricultural operations when taken in conjunction with the basic operations above described, and it would be futile to urge that they are not agricultural operations at all. But even though these subsequent operations may be assimilated to agricultural operations, when they are in conjunction with these basic operations could it be said that even though they are divorced from these basic operations they would nevertheless enjoy the characteristic of agricultural operations ? Can one eliminate these basic operations altogether and say that even if these basic operations are not performed in a given case the mere performance of these subsequent operations would be tantamount to the performance of agricultural operations on the land so as to constitute the income derived by the assessee therefrom agricultural income within the definition of that term ? 96. We are of opinion that the mere performance of these subsequent operations on the products of the land, where such products have not been raised on the land by the performance of the basic operations which we have described above woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Chinnathambi Gounden & Others or Sadasiva Ayyar, J., in Raja of Venkatagiri v. Ayyappa Reddi but must be understood as comprising all the products of the land which have some utility either for consumption or for trade and commerce and would also include forest products such as timber, sal and piyasal trees, Casuarina plantations, tendu leaves, horra nuts etc. 98. The question still remains whether there is any warrant for the further extension of the term "agriculture" to all activities in relation to the land or having connection with the land including breeding and rearing of live-stock, dairy-farming, butter and cheese-making, poultryfarming, etc. This extension is based on the dictionary meanings of the term and the definitions of "agriculture" collated in Wharton's Law Lexicon, as also the dicta of Lord Cullen and Lord Wright in Lean & Dickinson v. Ball and Lord Glanely v. Wightman quoted above. 99. Derbyshire, C.J., in Moolji Sicka & Co., In re treated tendu plants growing on the soil as part of the soil and therefore considered the pruning of the shrub as cultivation of the soil in a legal and technical sense and this extension of the term "agriculture" was also a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t will be seen that the term "agriculture" receives a wider interpretation both in regard to its operations as well as the results of the same. Nevertheless there is present all throughout the basic idea that there must be at the bottom of it cultivation of land in the sense of tilling of the land, sowing of the seeds, planting, and similar work done on the land itself. This basic conception is the essential sine qua non of any operation performed on the land constituting agricultural operation. If the basic operations are there, the rest of the operations found themselves upon the same. But if these basic operations are wanting the subsequent operations do not acquire the characteristic of agricultural operations. 102. All these operations no doubt require the expenditure of human labour and skill but the human labour and skill spent in the performance of the basic operations only can be said to have been spent upon the land. The human labour and skill spent in the performance of subsequent operations cannot be said to have been spent on the land itself, though it may have the effect of preserving, fostering and regenerating the products of the land. 103. This distinction is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuded and replanted cannot be considered to be negligible. The position therefore is that the whole of the income derived from the forest cannot be treated as non-agricultural income. If the enquiry had been directed on proper lines, it would have been possible for the Income-tax authorities to ascertain how much of the income is attributable to forest of spontaneous growth and how much to trees planted by the proprietors. But no such enquiry had been directed, and in view of the long lapse of time, we do not consider it desirable to direct any such enquiry now. The expenditure shown by the assessee for the maintenance of the forest is about Rs. 17,000 as against a total income of about Rs. 51,000.
Having regard to the magnitude of this figure, we think that a substantial portion of the income must have been derived from trees planted by the proprietors themselves. As no attempt has been made by the Department to establish which portion of the income is attributable to forest of spontaneous growth, there are no materials on which we could say that the judgment of the Court below is wrong.
106. The appeal is accordingly dismissed with costs.
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