Case: The Commissioner Of Income-Tax,West Bengal, Calcutta Vs. Raja Benoy Kumar Sahas Roy

position. In the first instance, it is defined as rent or revenue derived from land which is used for agricultural purposes; and it is next defined 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 still wider sense indicated above. 101. 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 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 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 subsequent operations cannot 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 not so important in cases where the agriculturist performs these operations as a part of his integrated activity in cultivation of the land. Where, however, the products of the land are of spontaneous growth, unassisted by human skill and labour, and human skill and labour are spent merely in fostering the growth, preservation and regeneration of such products of land, the question falls to be considered whether these subsequent and enjoy the characteristic of agricultural operations. 104. It is agreed on all hands that products which grow wild on the land or are of spontaneous growth not involving any human labour or skill upon the land are not products of agriculture and the income derived there from is not agricultural income. There is no process of agriculture involved in the raising of these products from the land. There are no agricultural operations performed by the assessee in respect of the same, and the only work which the assessee performs here is that of collecting the produce and consuming and marketing the same. No agricultural operations have been performed and there is no question at all of the income derived there from being agricultural income within the definition given in section 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. 105. 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 150 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 there from would be agricultural income. In view of the fact that the forest is more than 150 year old, the areas which had thus become denuded 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.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]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 forestand there wasa clear line of demarcation between agriculture and forestwith 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 Indians argument, however, does not take account of the fact that the entries in theof the Seventh Schedule to the Constitution are heads of legislation which are to be interpreted in a liberal manner comprising within their scope all matters incidental thereto.They are not mutually exclusive. If the assessee plants on a vacant site trees with a view that they should grow into a forest, as, casuarina plantationss labour and skill for that purpose, the income from such trees would clearly be. It hasto be remembered that even though this demarcation between agricultureforestry was available in the Lists contained in the Seventh Schedule to the Government of India Act1935, 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 IndianActs as early as 1886, if not earlier; videof the IndianAct, 1886 (II ofso 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 under1) means agricultural income as defined for the purposes of the enactments relating to Indian. It was urgedon 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 seedsplanting, or similar work on the land. The argument was that tilling of the land, sowing of the seedsplanting 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 operations, so that if in a particular case one found that the forest was of spontaneous growth, even so if forestry operations were carried on in such forests for the purpose of furthering the growth of forest trees, these operations would also enjoy the character of agricultural operations.If breeding and rearing of live, butter andetc., could be comprised within the term "agriculture", it was asked, why should these also be notile 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 in1) to mean agricultural income as defined for the purposes of enactments relating to Indian incometax and there is a definition of "agricultural income" to be found in1) of thee 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 "agriculturalare concerned, we feel freein view of the same not having been defined in the Act itself, to consider the various meanings which have been ascribed to the same in the legal and other dictionaries.The cases above noted all of them interpret the term "agriculture" in its narrower sense, though there is a marked progress fromthe extremely narrow construction put upon it by Bhashyam Ayyangar, J., in Murugesa Chettiat p.) anda Sastri, J., inat p.at p.. It is interesting to notethat all throughthese 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 wheneverl idea is fulfilled there is the user of land for agricultural purposes and the income derived there from becomes agricultural income.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 ofor spontaneous growth involving no expenditure of humanand 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.fa Ali Khan v. Commissioner of, which went up to the Privy Council, the Oudh Chief Court held that income from the sale of forest trees growing on land naturally and without the intervention of human agency, evenif the land was assessed to landrevenue, was not agricultural income within the meaning of(a) of theAct. The Courtfollowed an earlier decision given by it in the case of Maharaja of Kapurthala v. Commissioner of Incomeand Cat p., in which thehad discussed the meaning to be ascribed to the term "agriculture" and observed atof I"A fiscal statute should nodoubt be construedand, 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 Incometax 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 taxpayer the benefit of the dictionary definition when it is not disputed that the meaning of the term"agricultural&quot; cannot beextended for the purpose of theAct to all the secondarytherein suggested. We therefore construe the term in its primary sense. Wed that income from the sale of forest treesof spontaneous growthgrowing on land which is assessed to land revenue is not agricultural income within the meaning of(a) of the0. It may benoted at the outset that the definition of "agricultural income" given in1) of thex Act is in identical terms with the definitions of that term as given in the various AgriculturalActs passed by the several States. It will be idle therefore to treat "Taxes on Agricultural Income" which fall within the legislative competence of the Stateas having no relation at all to the corresponding provisionsof the Indiance it is determined that the income in question is derived from land used for agricultural purposes by agriculture, it would be agricultural income and as such exempt from tax under) of thex Act and would fall within the purview of the relevant provisions of the several AgriculturalActs passed by the various States.The result of this determination would be that the assessee would not be liable to assessment under the IndianAct but he would have to pay thex which would be levied upon him under the relative Agricultural. In order that an income derived by the assessee should fall within the definition of agricultural income two conditions are necessary to be satisfied and they(i) that the land from which it is derived should be used for agricultural purposes and is either assessed for land revenuethe 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(b) of. 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 ofaltogether 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 incometax, because if he was so subjected he would be liable to pay double taxation.Whatever may have been the genesisexemption of agricultural income fromthe liability to pay land revenue or fixed peishkush under Regulation XXV of 1802 was not considered by Rankin, J.