Case: Commissioner of Income Tax Vs. Jyotikana Chowdhurani &amp; Others

that no sum was contributed towards cultivation."13. Even though Sarjoo Prosad, C. J., and Ram Labhaya, J., proceeded on the basis that these facts were proved. Deka, J., struck a dissenting note and observed that there was no evidence as to the claim made by the respondents and that the statements made on affidavit could not be accepted as there was no means to test them. We shall however proceed on the basis that these facts were proved by the assessees and determine whether the operations which the assessees claim to have performed in these forests were agricultural operations such as to bring the income derived from these forests within the definition of agricultural income.14. It may be noted that on the question of the employment of human skill and labour, the Appellants Representative stated before the Tribunal that with regard to the Mechpara Estate, the expenses on forest establishment (including temporary hands) were estimated at Rs. 15,000 a year, the gross receipts being about Rs. 1,70,000. With regard to Parbatjoar Estate, whose gross receipts come to Rs. 3,32,414, the appellants representative stated that a total sum of Rs. 14,057 had been spent on the following heads:8 Forest Officers and 18 Barkandajas . . . - Rs. 5,21932 Forest Guards .- Rs. 4,838Proportionate salary of the Head Officers ...- Rs. 4,000Total - Rs.14,05715. On these facts the majority of the Judges held that even though there was no tilling of the land or planting of seeds 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 involves the expenditure of human skill and labour on the land itself. In the opinion of the Court those operations were "agricultural operations" and the land on which the trees stood was being used for "agricultural purposes" and therefore, the income from the sale of the trees was "agricultural income" and was exempt from taxation under S. 4 (3) (viii) of the Income Tax, Act and the Court accordingly answered the referred question in the affirmative.16. The appellant applied for and obtained certificates of fitness under s. 66A (2) of the Act and that is how these appeals have come up for hearing and final disposal before us.17. The connotation of the terms "agriculture" and "agricultural purpose " and the conditions under which the forestry operations performed by the assessee on forests of spontaneous growth can be assimilated to agricultural operations so as to constitute the income derived from the sale of the forest trees agricultural income within the meaning of its definition in s. 2 (1) of the Indian Income Tax Act have been laid down by us in the judgment just delivered inCommissioner of Income-tax, West Bengal v. Raja Benoy Kumar Sahas Roy,civil Appeal No. 165 of 1954, Dated 23-5-1957: ( (S) AIR 1957 S C 763) (A).18. Applying the principles which we have enunciated in that judgment to the facts of the instant cases,it appears that there was no planting or sowing of the seeds nor was any human agency employed for the purpose of tilling the soil.The soil had remained untouched and in the production of the income the assessees had made no contribution by way of cultivation. There were no basic operations either which were performed by the assessees on the forest lands. What was done by them was the performance of forestry operations which were in the nature of subsequent operations, operations which were performed after the produce and sprouted from the soil. The forests continued to be forests of spontaneous growth and the only result of the performance of these operations on the produce of the forests which was the outcome of spontaneous growth unaided by human skill and labour was the maintenance, preservation, nursing, improving and rearing of the forests. Even though these subsequent operations had the effect of increasing the produce of the forests, the forests nonetheless remained forests of spontaneous growth. No human skill and labour was spent by the assessees on the cultivation of the forest land nor was any human skill and labour performed on the land itself. The various operations which were described in the statements of case were no doubt for fostering the growth of the forests and obtain the greatest advantage from the forest trees, but they nevertheless were of spontaneous growth. Nothing was done by the assessees to grow the trees from the soil itself. They had grown there by the process of nature. The obstacles which would retard the growth of these trees which had grown spontaneously from the soil were certainly removed but these operations would not convert these subsequent operations into basic operations which would be the only pre-requisites for the cultivation of the forest land. Out of the categories (a) to (g) set out in the statement of facts, none of the operations was assimilated to basic operations in agriculture and unless and until there was even one basic operation on the land itself the rest of the operations could not be tacked on to them so as to convert the whole of them into agricultural operations. We are of opinion that the ratio adopted by the majority of the Judges of the High Court was erroneous and the referred question ought to have been answered in the negative.19. We are fortified in this conclusion if regard be had to be fact that the forestry operations which were performed by the assessees were of insignificant value as compared with the gross receipts derived by them from the sale of the forests trees. In the case of Mechpara Estate the costs of these operations did not even come to 8% and in the case of the Parbatjoar Estate even to 4% of the gross income.All these operations were mainly operations performed for faciliating the spontaneous growth of these trees from the forest land and could not by any stretch of imagination be assimilated to agricultural operations.

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

Explanation:
1[ds]17. The connotation of the terms "agriculture" and "agricultural purpose " and the conditions under which the forestry operations performed by the assessee on forests of spontaneous growth can be assimilated to agricultural operations so as to constitute the income derived from the sale of the forest trees agricultural income within the meaning of its definition in s. 2 (1) of the Indian Income Tax Act have been laid down by us in the judgment just delivered inCommissioner ofWest Bengal v. Raja Benoy Kumar Sahas Roy,civil Appeal No. 165 of 1954, Dated( (S) AIR 1957 S C 763) (A).18. Applying the principles which we have enunciated in that judgment to the facts of the instant cases,it appears that there was no planting or sowing of the seeds nor was any human agency employed for the purpose of tilling the soil.The soil had remained untouched and in the production of the income the assessees had made no contribution by way of cultivation. There were no basic operations either which were performed by the assessees on the forest lands. What was done by them was the performance of forestry operations which were in the nature of subsequent operations, operations which were performed after the produce and sprouted from the soil. The forests continued to be forests of spontaneous growth and the only result of the performance of these operations on the produce of the forests which was the outcome of spontaneous growth unaided by human skill and labour was the maintenance, preservation, nursing, improving and rearing of the forests. Even though these subsequent operations had the effect of increasing the produce of the forests, the forests nonetheless remained forests of spontaneous growth. No human skill and labour was spent by the assessees on the cultivation of the forest land nor was any human skill and labour performed on the land itself. The various operations which were described in the statements of case were no doubt for fostering the growth of the forests and obtain the greatest advantage from the forest trees, but they nevertheless were of spontaneous growth. Nothing was done by the assessees to grow the trees from the soil itself. They had grown there by the process of nature. The obstacles which would retard the growth of these trees which had grown spontaneously from the soil were certainly removed but these operations would not convert these subsequent operations into basic operations which would be the onlyfor the cultivation of the forest land. Out of the categories (a) to (g) set out in the statement of facts, none of the operations was assimilated to basic operations in agriculture and unless and until there was even one basic operation on the land itself the rest of the operations could not be tacked on to them so as to convert the whole of them into agricultural operations. We are of opinion that the ratio adopted by the majority of the Judges of the High Court was erroneous and the referred question ought to have been answered in the negative.19. We are fortified in this conclusion if regard be had to be fact that the forestry operations which were performed by the assessees were of insignificant value as compared with the gross receipts derived by them from the sale of the forests trees. In the case of Mechpara Estate the costs of these operations did not even come to 8% and in the case of the Parbatjoar Estate even to 4% of the gross income.All these operations were mainly operations performed for faciliating the spontaneous growth of these trees from the forest land and could not by any stretch of imagination be assimilated to agricultural operations.