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TMI Blog1956 (2) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT The Judgment of the Court was delivered by BHAGWATI, J. --- This appeal was filed by the Commissioner of Income-tax, Madras, against the judgment and order of the High Court of Judicature at Madras delivered on a reference by the Income-tax Appellate Tribunal under section 66(2) of the Indian Income-tax Act (XI of 1922) with a certificate under section 66A(2) of the Act read with articles 133 and 135 of the Constitution. The assessee, a Hindu undivided family, owned about 70 acres of agricultural land at Perur near Coimbatore. It also maintained in the estate 65 cows and 10 pairs of bulls. During the accounting year 1945-46, it received Rs. 28,000 from the Co-operative Milk Supply Union at Coimbatore to which it sold the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the High Court of Madras and the High Court directed the Tribunal to refer the following question under section 66(2) of the Act for its decision : "Whether on the facts and circumstances of the case, the income from the sale of milk received by the assessee during the accounting year is not 'agricultural income' within the meaning of the Income-tax Act." The said reference was heard by the High Court and judgment was delivered on the 15th April, 1952, whereby the High Court held that there was no material available to the Tribunal to hold that the income received from the sale of milk by the assessee during the accounting year was not "agricultural income" within the meaning of the Act and allowed the appeal. The Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ging that the cows were purely pasture-fed and not stall-fed and that they were maintained purely for manure and other purposes connected with agriculture. The sale of milk, it was further alleged, was not a commercial proposition but was only the sale of surplus milk after satisfying the assessee's needs. In regard to these allegations also no proof was furnished by the assessee to the Income-tax Officer and the matter rested with the bare allegations contained in the letter of its auditors dated the 26th February, 1947. Reliance was particularly placed by the assessee on the position in law as enunciated in Commissioner of Income-tax, Burma v. Kokine Dairy, Rangoon, and the passage in the judgment of Roberts, C. J., at page 509 therein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astri, J., in Commissioner of Income-tax, Madras v. K. E. Sundara Mudaliar : "In my opinion the word 'agriculture' is used in section 2 of the Income-tax Act in a wide sense so as to denote the raising of useful or valuable products which derive nutriment from the soil with the aid of human skill and labour. It would include horticulture, which involves intensive cultivation of land as garden in the production of fruits, flowers or vegetables. It would also include growing of trees or plants whose growth is effected by the expenditure of human effort, skill and attention in such operations, as those of ploughing, sowing, planting, pruning, manuring, watering, protecting, etc., as held by Spencer, J., in Panadai Pathan v. Ramaswami Chetty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner as well as the Income-tax Appellate Tribunal. They were of the opinion that the assessee had failed to furnish proper materials and had failed to discharge the burden which lay on it to prove that the income derived by it from the sale of milk during the accounting year was agricultural income. They rightly placed the burden of proof on the assessee but the High Court erroneously framed the question in the negative form and placed the burden on the Income-tax Authorities of proving that the income from the sale of milk received by the assessee during the accounting year was not agricultural income. In order to claim an exemption from payment of income-tax in respect of what the assessee considered agricultural income, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbatore, the quantity of milk sold by it which was of the average value of Rs. 2,500 per month and the payment of the sales tax of Rs. 235 for the year ended the 31st March, 1946, showed that what the assessee carried on was a regular business of producing milk and selling it as a commercial proposition and was, therefore, a business and not agricultural operations. The assessee was solely responsible for the paucity of these materials inasmuch as it did not furnish any materials to the Income-tax Officer in spite of the latter having given it an adjournment for the purpose. Counsel for the assessee, as an ultimate resort, appealed to us that we should send back the case to the High Court for calling a further statement of case from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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