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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 ..... s 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 ₹ 17,000 as against a total income of about ₹ 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. Appeal dismissed. - C.A. 165 OF 1954 - - - Dated:- 23-5-1957 - Judge(s) : BHAGWATI., KAPUR., VENKATARAMA AIYAR JUDGMENT The Judgment of the Court was delivered by BHAGWATI, J.--This appeal with certificate of fitness under section 66A(2) of the Indian Income-tax Act (XI of 1922) is directed against the judgment and order of the High Court of Judicature at Calcutta on a reference under section 66(1) of the Act. The respondent owns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards to protect off-shoots ; (iv) It has been satisfactorily proved that considerable amount of human labour and care is being applied year after year for keeping the forest alive as also for reviving the portions that get denuded as a result of destruction by cattle and other causes ; (v) The staff is employed by the assessee to perform the following specific operations : (a) Pruning, (b) Weeding, (c) Felling, (d) Clearing, (e) Cutting of channels to help the flow of rain water, (f) Guarding the trees against pests and other destructive elements, (g) Sowing of seeds after digging of the soil in denuded areas." The Tribunal found that the employment of human labour and skill in items (a) to (f) was necessary for the maintenance and upkeep of any forest of spontaneous growth. Regarding item (g), however, it found that the said operation had been performed only occasionally and over a small fraction of the area where the original growth had been found to have been completely denuded. Such occasions were, however, few and far between, the normal process being that whenever a tree was cut, a stump of about 6" height was left intact which sent forth off-sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s above, there is no definition of "agriculture" or "agricultural purpose" to be found in the Act and it, therefore, falls to be determined what is the connotation of these terms. An argument based on entries 14 and 19 of List II of the Seventh Schedule to the Constitution may be disposed of at once. It was urged that entry No. 14 referred to agriculture including agricultural education and research, protection against pests and prevention of plant diseases while entry No. 19 referred to forests and there was, therefore, a clear line of demarcation between agriculture and forests with the result that forestry could not be comprised within agriculture. If forestry was thus not comprised within agriculture, any income from forestry could not be agricultural income and the income derived by the assessee from the sale of the forest trees could not be agricultural income at all, as it was not derived from land by agriculture within the meaning of the definition of agricultural income given in the Indian Income-tax Act. This argument, however, does not take account of the fact that the entries in the Lists of the Seventh Schedule to the Constitution are heads of legislation which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instruction to these books." Cozens-Hardy, M. R., also said in Camden (Marquis) v. Inland Revenue Commissioners : " It is for the Court to interpret the statute as best they can. In so doing the Court may no doubt assist themselves in the discharge of their duty by any literary help which they can find, including of course the consultation of standard authors and reference to well-known and authoritative dictionaries." Turning, therefore, to the dictionary meaning of "agriculture" we find Webster's New International Dictionary describing it as "the art or science of cultivating the ground, including rearing and management of live-stock, husbandry, farming, etc. and also including in its broad sense farming, horticulture, forestry, butter and cheese-making etc." Murray's Oxford Dictionary describes it as "the science and art of cultivating the soil ; including the allied pursuits of gathering in the crop and rearing live-stock ; tillage, husbandry, farming (in the widest sense)." In Bouvier's Law Dictionary quoting the Standard Dictionary "agriculture" is defined as "the cultivation of soil for food products or any other useful or valuable growths of the field or garden ; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed to the term "agriculture" in various dictionaries and it is significant to note that the term has been used both in the narrow sense of the cultivation of the field and the wider sense of comprising all activities in relation to the land including horticulture, forestry, breeding and rearing of live-stock, dairying, butter and cheese-making, husbandry etc. It was urged on behalf of the assessee that the Court should accept the wider significance of the term and include forestry operations also within its connotation even though they did not involve tilling of the land, sowing of seeds, planting, or similar work on the land. The argument was that tilling of the land, sowing of the seeds, planting or similar work on the land were no doubt agricultural operations and if they were part of the forestry operations carried on by the assessee the subsequent operations. would certainly be a continuation of the same and would therefore acquire the characteristic of agricultural operations. But the absence of these basic operations would not necessarily make any difference to the character of the subsequent operations and would not divest them of their character of agricultural operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural land" mentioned in Entry 21 of List II of the Seventh Schedule to the Government of India Act, 1935, should be interpreted in its wider significance as including lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpose of husbandry. (See Sarojinidevi v. Shri Krishna Anjanneya Subrahmanyam and Others and Megh Raj v. Allah Rakhia). While recognizing the force of the above expressions of opinion we cannot press them into service in favour of the assessee for the simple reason that "agricultural income" has been defined in the Constitution itself in article 366(1) to mean agricultural income as defined for the purposes of enactments relating to Indian Income-tax and there is a definition of "agricultural income" to be found in section 2(1) of the Indian Income-tax Act. We have therefore got to look to the terms of the definition itself and construe the same regardless of any other consideration, though, in so far as the terms "agriculture" and "agricultural purposes" are concerned, we feel free, in view of the same not having been defined in the Act itself, to consider the various meanings which have been ascribed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the land but also allied activities which had relation to the land and operations which had the effect of fostering the growth, preservation and maintenance as also the regeneration of the products of the land, thus bringing within its compass not only the basic agricultural operations but also the further operations performed on the products of the land even though they were not necessarily accompanied by these preliminary basic operations. As against these cases which dealt with these preliminary basic operations and also the further operations either by themselves or in conjunction with the former, which of course necessarily involved the expenditure of human skill and labour in carrying out those operations, there were instances of products of land which grew wild or were of spontaneous growth without the expenditure of human skill and labour and which it was agreed on all hands could not be comprised within "agriculture" and the income from which could not fall within the definition of "agricultural income". We shall briefly discuss the various cases dealing with these different aspects and try to evolve some principle therefrom which would serve as a guide in the determinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observations of Cave, J., in Ellis Co. v. Hilse : "The very object of this exemption is the well-known one of favouring agriculture--an old object of English legislation in favour of a very important industry", and stated : " This observation, of Mr. Justice Cave will apply with much greater force in this country where the agricultural industry is more important than in England and is one that is common to wet cultivation as to garden and dry cultivation, the object of all such cultivation being chiefly to procure food for men and cattle and other products of the soil which are usually consumed by the people as gentle stimulants or by way of luxury. Betel leaf is an article of daily consumption with all classes in this country as tobacco leaf is with most classes and betel vine is generally grown side by side with plantains, the products of which are among the chief articles of vegetable food." The lease in that case being one for, the, cultivation of betel was therefore held to be agricultural lease and Shephard J., agreed with this conclusion revising the opinion which he had expressed earlier in Kunhayan Haji v. Mayan : In Raja of Venkatagiri v. Ayyappa Reddy the que ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of agricultural income from income-tax. No other reason is suggested than the equity of exempting from further burden income which had already paid toll to the State in the shape of land revenue." The question therefore whether the income from forests would be "agricultural income" within the meaning of section 4 of the Income-tax Act was thus left open and the decision that income from forests was not liable to income-tax was reached under the terms of the sanad and of section 1 of Regulation XXV of 1802. Kaju Mal v. Salig Ram was concerned inter alia with a field in which tea was grown and the question was whether the land fell within the definition of "agricultural income" or "village immoveable property" as given in section 3(i) and (ii) of the Punjab Pre-emption Act, 1905. The Court held that fields planted with tea bushes were fields used for agricultural purposes and this decision was affirmed by the Privy Council in Kaju Mall v. Salig Ram. It was held that the words "agricultural purposes" in section 2(iii) of the Punjab Alienation of Land Act, 1900, included the cultivation of tea ; consequently land which was not occupied as the site of any building in a town or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act by reason of its being agricultural income. There is no such exemption in the case of income derived from the sale of timber." There is no further discussion to be found in the judgment which would throw light on the question whether such receipts by the assessee were agricultural income and as such exempt from income-tax. The later decision of the Madras High Court in Chandrasekhara Bharathi Swamigal v. Duraisami Naidu however contains an elaborate discussion as to the connotation of the term "agriculture". The case arose under the Madras Estates Land Act (Mad. Act I of 1908) and the question which the Court had to consider was whether growing casuarina trees, i.e., trees for fuel, was an agricultural purpose so as to make the person who held the land for that purpose a "ryot" within the meaning of the Madras Estates Land Act. The Court held that land held for growing casuarina trees was not land held for purposes of agriculture and the person holding the land for that purpose was not a "ryot" within the meaning of the Act. While delivering the judgment of the Court, Reilly, J., embarked upon a consideration of what the term "agriculture" meant and came t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a number of years, sometimes as long as a century, during most of which period the land itself is untouched, to describe that as agriculture appears to me inappropriate. To my mind it is something very different from the cultivation of a field or of an open space. It may be noticed that in Kesho Prasad Singh v. Sheo Pragash Ojha their Lordships of the Privy Council approved of the opinion expressed by two learned judges of the Allahabad High Court that land let for a grove was not let for an agricultural purpose. It happened that the case then under consideration was one arising under the Agra Tenancy Act. But in that Act there is no definition of 'agriculture'. Therefore both the learned judges of the Allahabad High Court and their Lordships of the Privy Council were, we may take it, considering what is the meaning of the word 'agriculture' in its general sense. I may mention also that in Commissioner of Income-tax v. Manavedan Tirumalpad a Full Bench of this Court remarked that income from cutting timber was not agricultural income." It may be noticed that the learned judge enlarged the connotation of the term "agriculture" by having regard to the circumstances in which the cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lture.' There is some kind of cultivation or prodding of the soil at the inception when the planting is done and subsequently also at intervals. In the case of coffee grown on hill slopes, there is no ploughing or tillage as in the case of wet and dry fields ; but it cannot be maintained that growing coffee is not an agricultural operation. Coffee and tea plants stand on the soil for many years, and their produce is gathered periodically. In the padugai lands or lands lying between the sandy bed and the flood bank of rivers, plantains are grown in many places in deltaic tracts. Young plants are often brought and planted in pits dug for the purpose in a row with sufficient interspaces. Trenches are dug by the side of a row of plantain trees in order to catch and retain water. The plantain trees last for about two years, and from each tree off-shoots spring up and grow in place of the parent tree. There is thus a natural replenishment of the plantain garden. It cannot be said that the raising of plantains is not an agricultural purpose. Similarly in the case of sugarcane the plants stand on the land for two years or a little more, and there are usually two cuttings. Castor plants sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , s. 9 : " The expression 'agricultural land' means any land used as arable, meadow, or pasture ground only, cottage gardens exceeding one-quarter of an acre, market gardens, nursery grounds, orchards, or allotments, but does not include land occupied together with a house as a park, gardens other than as aforesaid, pleasure grounds or any land kept or preserved mainly or exclusively for purposes of sport or recreation or land used as a race course," and also the meaning ascribed to it in Murray's Oxford English Dictionary quoted above and observed : " We also note that it is there pointed out that the restriction of the word agriculture to tillage, as in the following quotation, is rare. The lands were not fields for agriculture but pastures for cattle. We believe that we cannot do better than follow these definitions in attempting to decide what, for the purposes of sub-section (3) of section 63 of the Municipalities Act, are or are not lands used solely for agricultural purposes..............................We do not consider that any distinction can be drawn between large and small plots of lands on which roots or grains are cultivated. All such land must be held to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure of human care and attention in such operations as those of ploughing, sowing, planting, pruning, manuring, watering, protecting, etc." Ramesam, J., who delivered a concurring judgment referred to the definition of agriculture adopted in Wharton's Law Lexicon and was of opinion that it would include the use of land as "meadow or pasture or orchard or osier or woodland, or for market gardens, nursery grounds or allotments etc." but would exclude all cultivation of fibrous plants such as cotton, jute and linen and all plants used for dyeing purposes, such as indigo etc. and all timber trees and flowering plants etc. According to him, the rearing of a casuarina plantation requires some preparation of the ground and subsequent care by watering the plants and he was, therefore, of opinion that rearing of casuarina trees was agricultural purpose within the meaning of section 117 of the Transfer of Property Act. It may be observed however that according to both the learned Judges some preparation of the ground or some expenditure of human care and attention in such operations as those of ploughing, sowing, planting, etc., was considered essential for constituting these oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l appliances and power, not only in such matters as ploughing, reaping, threshing, and so forth, but in such ancient methods of preparing its products as making cream, butter or cheese. The farmer is still dealing with the products of the soil, and Schedule B covers the income." The House of Lords were dealing with the profits of occupation of land not with income derived from user of land for agricultural purposes and, therefore, not restricted in their interpretation of the term "occupation" and all these activities which were described therein might as well have been comprised within the scope of the taxing statutes. What we have, however, to see is whether these activities fall within the connotation of the terms "agriculture" and "agricultural purpose" which are the only terms to be considered for bringing the income derived therefrom within the definition of agricultural income in section 2(1)(a) of the Indian Income-tax Act. In Moolji Sicka Co., In re Derbyshire, C.J., understood the term "agriculture" in a wider sense as including operations not only on the land itself but on the shrubs which grew on the soil and were according to him a part of the soil. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes : Emperor v. Alexander Allen. Rearing of live-stock such as cows, buffaloes, sheep and poultry is included in 'husbandry'. These animals are considered to be the products of the soil, just like crops, roots, flowers and trees, for they live on the land and derive their sustenance from the soil and its produce : Glanely v. Wightman ; Commissioner of Income-tax, Burma v. Kokine Dairy Co. It is not therefore legitimate, in my opinion, to confine the word 'agriculture' to the cultivation of an open field with annual or periodical crops like wheat, rice, ragi, cotton, tobacco, jute, etc. Casuarina is usually raised on dry lands of poor quality, and it is usual to find the same land used alternatively for the cultivation of ordinary cereal crops like groundnut, gingelly, cholam, kambu, etc. and for the raising of casuarina plantations. The land bears the dry assessment whatever be the nature of the crop raised." This enlarged connotation of the term "agriculture" has been tinged by the dictionary meanings ascribed to it in Murray's Oxford Dictionary and Webster's Dictionary quoted above which understood the term as including the allied pursuits of rearing, feeding and manage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivation. They appear to have grown naturally in the jungles without the intervention of the human agency, and in my view the growth of these trees cannot be said to result from the cultivation of the soil. In fact, it was the absence of cultivation that permitted the area to develop into a jungle................." " Phalkar.--This is income derived from wild jungle fruits, and it cannot be said that the fruit gathered is the result of the cultivation but, on the contrary, it is the result of the absence of cultivation. Trees and bushes yielding these fruits grow not on cultivated soil but on the land not under cultivation and frequently the more neglected and wild the land is the thicker grow these wild bushes and trees yielding such crop. Practically in all cases the crop is the result of want of cultivation and not the result of cultivation. In my judgment it is not established that the income described as phalkar in these cases is income derived from land used for agriculture or from agriculture and is, therefore, not assessable to agricultural income-tax." In Raja Mustafa Ali Khan v. Commissioner of Income-tax, U.P. C.P., which went up to the Privy Council, the Oudh Chi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Chandra Barua v. King Emperor and the Court proceeded to consider whether income derived from forests of spontaneous growth by the sale of wood, bark, leaves, other usufruct of trees, minor forest produce and licence fees and from trees which have grown wild in non-forest areas was agricultural income within the meaning of section 2(1) of the Indian Income-tax Act. The Court observed : " There is ample authority for holding that income derived from trees which have grown wild is not agricultural income, but, without the aid of authority, we should have no hesitation in saying that to describe it as such would involve a distortion of the meaning of the word 'agriculture'." and such income was accordingly held to be not agricultural income within the meaning of section 2(1) of the Act. (It may be noted that the appellant preferred an appeal to the Privy Council against this decision but the same was dismissed : vide Yuvarajah of Pithapuram v. Commissioner of Income-tax, Madras.) Benoy Ratan Banerji v. Commissioner of Income-tax, U.P., C.P. Berar, was another case in which the assessee derived income from the sale of timber from his Zamindari on which there had been for m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited with approval the following passage from the judgment of the Federal Court in Meghraj v. Allah Rakhia. " Their Lordships confirmed a decision of the Punjab Chief Court to the effect that land used as a tea garden was used for 'agricultural purposes'. In the judgment of the Chief Court (which was generally approved by their Lordships) it was observed that the term "agricultural land" is used in the Act of 1905 in its widest sense to denote all land which is filled..........The Chief Court had held that land covered by a natural forest was not agricultural land, and this view also would seem to have been confirmed by the Judicial Committee " and they further proceeded to observe : " We have underlined the word 'tilled' because, in our opinion, that brings out the distinction which we have sought to draw between an agricultural and a non-agricultural purpose. The decisions referred to are Kaju Mal v. Saligram and Kaju Mall v. Saligram." The Court came to the conclusion that it was essential that the income should be derived from some activity which necessitated the employment of human skill and labour and which was not merely a product of man's neglect or inaction exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apuram v. Commissioner of Income-tax, Madras), and the High Court of Allahabad (see Benoy Ratan Benerji v. Commissioner of Income-tax, U.P., C.P. Berar) and elsewhere in India. The question seems not yet to have been decided 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, and upon this question their Lordships express no opinion. It is sufficient for the purpose of the present appeal to say (1) that in their opinion no assistance is to be got from the meaning ascribed to the word 'agriculture' in other statutes and (2) that, though it must always be difficult to draw the line, yet unless there is some measure of cultivation of the land, some expenditure of skill and labour upon it, it cannot be said to be used for agricultural purposes within the meaning of the Income-tax Act. In the present case their Lordships agree with the High Court in thinking that there is no evidence which would justify the conclusion that this condition is satisfied." It may be noted that the Privy Council also proceeded upon the footing that there was nothing to show that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndian Income-tax Act so that income derived therefrom could fall within the definition of "agricultural income" contained therein. The first case which came up for consideration after the above decision of the Privy Council was the case of Commissioner of Agricultural Income-tax, West Bengal v. Raja Jagadish Chandra Deo Dhabal Deb before the Calcutta High Court. The assessee was the Zamindar of Chilkigarh in the district of Midnapore the western part of which contained jungle mahal. The income in question was derived from the sale of sal trees which grew in the forest. The forest was not an uncared for virgin forest. The assessee maintained a staff of one forester, 6 guards and 24 chaukas to look after the forest and for the proper cultivation of the same. The sal trees were generally sold off in blocks when about 5 years old. Annually blocks of about 1,000 acres were sold up. All the trees in the blocks sold up were cut down by the purchasers for sale as fuel and house posts. During the rainy season from the stumps of the trees cut down, new shoots came out which grew into mature trees in 15 years, to be cut down again. In order to prevent damage to the young shoots in the earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fact recorded by the Tribunal in the case before them the Court was of opinion that the forest in question was not either a virgin forest or containing trees which grew spontaneously and naturally without any human intervention whatever. The circumstance that there was felling of the trees, the new shoots appearing during the rainy season without any human intervention, guarding of the new shoots from either being trampled under foot or being browsed by animals and the removal of undergrowth of fallen leaves were considered regular operations in forestry in the forests in question which required the application of human efforts sufficient to include them under the head "agricultural income". It was further observed : " If the view of the judicial Committee were to exclude all kinds of income from the category of agricultural income unless there was actual cultivation of the soil, reference to 'regular operations of forestry' would have been unnecessary. Not that there must always be 'some measure of cultivation of the land' and 'some expenditure of skill and labour upon it' but that the proof of either would be sufficient to bring the case within either clause (a) or (b) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income-tax and after quoting the passage from the judgment above referred to proceeded to observe : " Their Lordships have not laid down that some measure of cultivation is absolutely necessary before it can be said that land is used for agricultural purposes. In fact 'some measure of cultivation' is placed on a par with some 'some expenditure of skill and labour.' If either of the two conditions exists, the land could be said as being used for agricultural purposes. Tillage or actual cultivation would not in their view be an essential pre-requisite of 'agriculture' in its wider implication. " After referring to a decision of the Calcutta High Court in Hedayet Ali v. Kamalanand Singh and Commissioner of Agricultural Income-tax v. Raja Jagadish Chandra Deo Dhabal Deb the Court observed : " The review of the authorities considered above leads to the conclusion that purpose within the meaning of the Assam Act can be agricultural even if its achievement does not involve actual cultivation of the soil. In the words of their Lordships of the Privy Council in the case of receipts from the sale of forest trees, the income would be agricultural if there is some expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of spontaneous growth, though it might yield regular income, would not be income from agriculture as no operations were carried out and no human skill and labour was expended in such a case on the land itself. Raja Benoy Kumar Sahas Roy v. Commissioner of Income-tax, West Bengal, the judgment under appeal before us here, struck a middle path. The Tribunal had found that except the sowing of seeds, the operations carried out, though equally necessary for the maintenance and upkeep of any forest of spontaneous growth, did not involve such expenditure of human labour and skill as to constitute them operations in agriculture. The sowing of seeds were "few and far between" and the normal process by which the forest grew again, after a part of it had been cut down, was by the growing out of off-shoots from the stumps left, the operations were therefore in the main only operations for the "maintenance, preservation, nursing and rearing", of the forest. It was urged before the High Court on behalf of the assessee that the exemption from agricultural income-tax determined in Commissioner of Agricultural Income-tax, West Bengal v. Raja Jagadish Chandra Deo Dhabal Deb covered the case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trees, it might well be said that operations in forestry involving agricultural operations were carried on on the forest land and that income derived from the land was derived from agriculture. Sir Kameshwar Singh v. Commissioner of Income-tax, Bihar Orissa, which is the subject matter of C.A. Nos. 112 to 117 of 1956 before us also was a case under the Indian Income-tax Act (XI of 1922). It was found by the Appellate Tribunal that the sal and ebony trees which grew in the forest were conserved by allowing each a circle of 15 feet, that there was cutting down of the trees and jungles which fell within that circle leaving sufficient space for growth and that forest conservancy staff was maintained to look after the forest. The Court construed the observations of the Privy Council in Raja Mustafa Ali Khan's case to mean that "in order to show that an income is agricultural income within the meaning of the definition, it must be found that the land itself was cultivated and that there was some expenditure of skill and labour upon it." The Court held that even conceding that the two conditions laid down by the Privy Council in Raja Mustafa Ali Khan's case were to be read as altern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , when they proceeded to add after a comma, the phrase 'some expenditure of skill and labour upon it', they evidently intended to signify something more than mere cultivation. There is, of course, no conjunctive phrase between the two expressions but in the context the meaning seems to be plain."' Ram Labhaya, J., expressed himself in the test laid down by the Privy Council in these words : " A test however was laid down for finding out when land may be said to be used for agricultural purposes. The test requires that there must be some measure of cultivation of the land ; some expenditure of skill and labour upon it. It has however to be borne in mind that their Lordships when stating the facts did point out that the case had proceeded on the footing that there was nothing to show that the assessee was carrying on any regular operations in forestry. This statement has an important bearing on the interpretation of the test. Such operations in forestry are carried on in forests. They involve the use of human labour and skill on the soil. They aim at stimulating growth and could easily satisfy the requirements of the test evolved by their Lordships. Due importance therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the sole or indispensible test of agriculture. On the facts before it, the Court held that the operations carried on by the assessee through the forest establishment showed that there had been both cultivation of the soil as well as the application of human skill and labour upon : the land as well as on the trees themselves, and that therefore the income derived from the forest was exempt from taxation under section 4(3)(viii) of the Indian Income-tax Act. Before parting with these cases it may be apposite here to note the following observations of Viswanatha Sastri, J., in Commissioner of Income-tax, Madras v. Sundara Mudaliar at page 277 : " In Commissioner of Agricultural Income-tax v. Raja Jagadish Chandra Deo it was held by a Division Bench of the Calcutta High Court that income derived from the sale of sal trees growing spontaneously in forests and not planted by man was 'agricultural' income within the meaning of section 2(1) of the Bengal Agricultural Income-tax Act. There was no digging or ploughing of the land nor planting of trees but there were 'operations in forestry' such as guarding the forest trees to keep away cattle and allowing leaves and undergrowth to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n income derived by the assessee should fall within the definition of agricultural income two conditions are necessary to be satisfied and they are : (i) that the land from which it is derived should be used for agricultural purposes and is either assessed for land revenue in the taxable territories or is subject to local rates assessed and collected by the officers of the Government as such ; and (ii) that the income should be derived from such land by agriculture or by one or the other of the operations described in clauses (ii) and (iii) of section 2(1)(b) of the Indian Income-tax Act. It was at one time thought that the assessment of the land to land revenue in the taxable territories was intended to exempt the income derived from that land from liability for payment of income-tax altogether and that theory was based on the assumption that an assessee who was subject to payment of land revenue should not further be subjected to the payment of income-tax, because if he was so subjected he would be liable to pay double taxation. It is interesting to note at this stage the genesis of the provision exempting agricultural income derived from the lands assessed to land revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ole or in part, as in the case of inams. Mines, minerals, and quarries having been reserved by the State, at any rate in respect of lands other than those comprised in a permanently settled estate, income derived from such sources was not exempted from Income-tax. The revenue assessment was based on the quality of the soil and the income derived from the produce of the lands, and therefore the exemption from income-tax was limited to agricultural income derived from assessed lands. Such is the reason for exemption from Income-tax of agricultural income." Whatever may have been the genesis of the exemption of agricultural income from income-tax, the liability to pay land revenue or fixed peishkush under Regulation XXV of 1802 was not considered by Rankin, J., as a deterrent against the levy of income-tax in appropriate cases, even on certain classes of income derived from the permanently settled estates, if that was the clear intention of the legislature. The learned Judge observed in Emperor v. Probhat Chandra Barua : " Some reference was made at the bar to the practice of the Revenue Authorities since 1886 as regards fisheries in permanently settled estates, but there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "agricultural operations" and it is pertinent therefore to enquire what is the connotation of the term "agriculture". As we have noted above, the primary sense in which the term agriculture is understood is agar--field and cultra--cultivation, i.e., the cultivation of the field, and if the term is understood only in that sense agriculture would be restricted only 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 on the land. They would be the basic operations and would require the expenditure of human skill and labour upon the land itself. There are however other operations which have got to be resorted to by the agriculturist and which are absolutely necessary for the purpose of effectively raising the produce from the land. They are operations to be performed after the produce sprouts from the land, e.g., weeding, digging the soil around the growth, removal of undesirable undergrowths and all operations which foster the growth and preserve the same not only from insects and pests but also from depradation from outside, tending, pruning, cutting, harvesting, and rendering the produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... themselves. If this integrated activity which constitutes agriculture is undertaken and performed in regard to any land that land can be said to have been used for "agricultural purposes" and the income derived therefrom can be said to be "agricultural income" derived from the land by agriculture. In considering the connotation of the term "agriculture" we have so far thought of cultivation of land in the wider sense as comprising within its scope the basic as well as the subsequent operations described above, regardless of the nature of the products raised on the land. These products may be grain or vegetables or fruits which are necessary for the sustenance of human beings including plantations and groves, or grass or pasture for consumption of beasts or articles of luxury such as betel, coffee, tea, spices, tobacco etc., or commercial crops like cotton, flax, jute, hemp, indigo etc. All these are products raised from the land and the term "agriculture" cannot be confined merely to the production of grain and food products for human beings and beasts as was sought to be done by Bhashvam Ayyangar, J., in Murugesa Chetti v. Chinnathambi Gounden Others or Sadasiva Ayyar, J., in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as income derived from such land by agriculture or by the activities described in clauses (ii) and (iii) of section 2(1)(b) of the Act. These activities are postulated to be performed by the cultivator or receiver of rent-in-kind of such land in regard to the products raised or received by him which necessarily means the produce raised on the land either by himself or by the actual cultivator of the land who pays such rent-in-kind to him. If produce raised or received by the cultivator or receiver of rent-in-kind is thus made the subject-matter of clauses (ii) and (iii) in section 2(1)(b) of the Act, the term "agriculture" used in clause (i) of section 2(1)(b) must also be similarly restricted to the performance of the basic operations on the land and there is no scope for reading the term "agriculture" in the still wider sense indicated above. If the term "agriculture" is thus understood as comprising within its scope the basic as well as subsequent operations in the process of agriculture and the raising on the land of products which have some utility either for consumption or for trade and commerce, it will be seen that the term "agriculture" receives a wider interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(1) of the Indian Income-tax Act. Where, however, the assessee performs subsequent operations on these products of land which are of wild or spontaneous growth, the nature of those operations would have to be determined in the light of the principles enunciated above. Applying these principles to the facts of the present case, we no doubt start with the finding that the forest in question was of spontaneous growth. If there were no other facts found, that would entail the conclusion that the income is not agricultural income. But then, it has also been found by the Tribunal that the forest is more than 50 years old, though portions of the forest have from time to time been denuded, that is to say, trees have completely fallen and the proprietors have planted fresh trees in those areas, and they have performed operations for the purpose of nursing the trees planted by them. It cannot be denied that so far as those trees are concerned, the income derived therefrom would be agricultural income. In view of the fact that the forest is more than 150 years old, the areas which had thus become denuded and replanted cannot be considered to be negligible. The position therefore is that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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