Summarize the following court judgment. Appeal No.426 of 1957. Appeal from the judgment and order dated April 21	 1955	 of the Orissa High Court at Cuttack in Special Jurisdiction Case No. 179 of 1951. A. N. Kripal	 R. H. Dhebar and D. Gupta	 for the appellant. A. V. Viswanatha Sastri	 M. section K. Sastri and R. Jagannatha Rao	 for the respondent. October 14. The Judgment of the Court was delivered by VENKATARAMA AIYAR	 J. This is an appeal against the judgment of the High Court of Orrissa in a reference under section 66(1) of the Indian Income tax Act	 1922	 hereinafter referred to as the Act	 and the point for decision is whether income received by the respondent by the sale of trees growing in his forests is agricultural income exempt from taxation under section 4(3)(viii) of the Act. The respondent is the proprietor of the impartable zamin of Jaipur in Koraput District. The estate is of the area of 12	000 sq. miles of which 1540 sq. miles are reserve forest and 100 sq. miles	 protected forest. The respondent derives income from the forests by the sale of timber such as teak	 salwood	 lac	 myrabolam	 tamarind	 cashewnuts and firewood. There is no 23 178 dispute either as to the receipt of such income or as to its quantum. All tat appears in the account books of the respondent. The point in controversy is as to whether this income is chargeable to tax. It is the contention of the respondent that this is agricultural income as defined ins. 2(1) of the Act	 and that it is	 in consequence	 exempt under section 4(3)(viii). By his 31	 1943	 the Income tax order dated January Officer held that the forests in question had not been proved to have been planted by the respondent	 that the trees were of spontaneous growth	 and that the income therefrom was not within the exemption under section 4(3)(viii); and this order was confirmed on appeal by the Appellate Assistant Commissioner. The respondent took the matter in further appeal to the Appellate Tribunal	 and there put forward the contention that the Incometax Officer had failed to take into account a letter of the Dewan dated June 3	 1942	 which gave a detailed account of the operations carried on by the estate in the rearing and maintenance of forests and that on the facts mentioned in that letter	 his finding that there had been no plantation of trees was errolieous. By its order dated April 9	 1946	 the Tribunal accepted this contention	 and directed a fresh enquiry into the facts mentioned in the said letter. Pursuant to this order	 the Income tax Officer again enquired into the matter. He observed that though he gave ample opportunities to the respondent to prove that there was plantation of trees by the estate	 no materials were placed in proof of that fact and that neither plantation books nor any working plans for timber plantation had been produced. He accordingly held that the forests had grown naturally	 and that the income therefrom was assessable to tax. On this report	 the appeal again came up for hearing before the Tribunal. The main contention urged by the respondent at the hearing was that the facts showed that the forests which had yielded income during the year	 ' of account could not have been the virgin forests which had originally grown spontaneously on the hills	 because they had been periodically denuded by the hill tribes in the process of Podu cultivation carried on by 179 them. What this Podu cultivation means is thus stated in the ]District Gazetteer	 Vishakapatnam	 1907: " This consists in felling a piece of jungle	 burning the felled trees and undergrowth	 sowing dry grain broadcast in the ashes (without any kind of tilling) for two years in succession	 and then abandoning the plot for another elsewhere. " The argument of the respondent was that as a result of the Podu cultivation	 the original forests should have disappeared and that the trees that had subsequently grown into forest and sold as timber must have been planted by human agency and their sale proceeds must accordingly be agricultural income. Dealing with this contention	 the Tribunal observed that though there had been extensive destruction of forests in the process of Podu cultivation	 nevertheless	 considerable areas of virgin forests still survived	 that the evidence of actual cultivation and plantation by the zamin authorities was meagre and unsubstantial	 that no expenses were shown to have been incurred on this account prior to 1904	 that the amount shown as spent during that year was negligible	 that the trees planted then could not have been the trees sold as timber during the assessment years	 and that the respondent bad failed to establish facts on which he could claim exemption. It should be mentioned that this order covered the assessments for five years from 1942 43 to 1946 47	 the facts relating to the character of the income being the same for all the years. On the application of the respondent	 the Tribunal referred the following question for the decision of the High Court : " Whether on the facts and in the circumstances the income derived from forest in this case is taxable under the Indian Income tax Act. " The reference was heard by Panigrahi	 C. J.	 and Misra	 J.	 who answered it in the negative. They observed : " It appears to us that the cases as set out by both parties have been put too high. The department takes the view that unless there is actual cultivation of the 180 soil the income from the forest trees cannot be regard. 	led as agricultural income. The fact that the assessee has spent some money and planted valuable trees in some areas is not sufficient to free the income out of the extensive forests which owe their existence to spontaneous growth	 from its liability to taxation. The assessee on the other hand seeks to create an impression that there is not a single tree of spontaneous growth	 in these forests	 and such trees as now constitute forests have sprung up out of the stumps left by the hillmen as a result of the system of I Podu ' cultivation adopted by them. It appears to us that neither of these claims can be regarded as precise or correct." The learned Judges then observed that the forests in the Koraput area had been under Podu cultivation for a long period	 and that as the result of that cultivation they had practically disappeared even by the year 1870	 that the trees had subsequently grown into forests and they had also been destroyed by about the year 1901	 and that therefore there could not have been any virgin forest left surviving. Then they referred to the fact that the respondent had been maintaining a large establishment for the preservation of the forests	 and that there had been organised activities (1) " in fostering the growth of the trees and preserving them from destruction by man and cattle; (2) in cultivation of the soil by felling and burning trees from time to time; (3) in planned exploitation of trees by marking out the areas into blocks; (4) in systematic cutting down of trees of particular girth and at particular heights; (5) in planting new trees where patches occur; and (6) in watering	 pruning	 dibbling and digging operations carried on from time to time ". And they stated their conclusion thus: " All these and similar operations which have been undertaken by the assessee through his huge forest establishment	 show that there has been both cultivation of the soil as well as application of human skill and labour	 both upon the land and on the trees themselves. It cannot be assumed therefore that all the trees are of spontaneous growth. The indications	 on 181 the other hand	 appear to be that most of them are sprouts springing from burnt stumps. There is no basis for the assumption made by the Income tax Department that all the trees are forty years old and that they owe their existence to spontaneous growth. Apart from that it will be noticed that what distinguishes the present case from all the reported decisions is that practically the whole of the forest area has been subjected to process of 'Podu ' cultivation spreading over several decades so that it is impossible to say that there is any virgin forest left. The onus was certainly upon the department to prove that the income derived from the forest was chargeable	 to tax and fell outside the scope of the exemption mentioned in Section 4(3)(viii). " In this view	 they held that the Department had failed to establish that the income derived from the sale of trees was not agricultural income	 and answered the reference in favour of the respondent. The learned Judges	 however	 granted a certificate to the appellant under section 66(A)(2) of the Act	 and that is how the appeal comes before us. At the very outset	 we should dissent from the view expressed by the learned Judges that the burden is on the Department to prove that the income sought to be taxed is not agricultural income. The law is well settled that it is for a person who claims exemption to establish it	 and there is no reason why it should be otherwise when the exemption claimed is under the Income tax Act. The learned Judges were of the opinion that their conclusion followed on the principle of the law of Income tax that " where an exemption is conferred by a statute	 the State must not get the tax either directly or indirectly "	 and support for this view was sought in the following observations of Lord Somervell	 L. J.	 in Australian Mutual Provident Society vs Inland Revenue Commissioners (1): " The rule must be construed together with the exempting provisions which	 in our opinion	 must be regarded as paramount. So far as the rule	 if taken (I) 182 in isolation	 would have the effect of indirectly depriving the company of any part of the benefit of the exemption	 its operation must be cut down	 so as to prevent any such result	 and to allow the exemption to operate to its full extent. " These observations have	 in our opinion	 no bearing on the question of burden of proof. They merely lay down a rule of construction that in determining the scope of a rule	 regard must be had to the exemptions engrafted thereon	 and that the rule must be so construed as not to nullify those exemptions. No such question arises here. There is ample authority for the view that the principle that a person who claims the benefit of an exemption has to establish it	 applies when the exemption claimed is under the provisions of the Income tax Act. Vide the observations of the Lord President and of Lord Adam in Maughan vs Free Church of Scotland (1) and the observations of Lord Hanworth	 M. R.	 in Keren Kayemeth Le Jisroel Ltd. vs The Commissioners of Inland Revenue (2) at p. 36 that " the right to exemption under Section 37 must be established by those who seek it. The onus therefore lies upon the Appellants "	 and of Lord Macmillian at p. 58 that	 " In my opinion	 the Appellants	 have failed to bring it within any one of these categories and consequently have failed in what was essential for them to make out	 namely	 that this Company is a body of persons established for charitable purposes only. " The decisions of Indian Courts have likewise ruled and quite rightly that it is for those who seek exemption under section 4 of the Act to establish it. Vide Amritsar Produce Exchange Ltd. In re (3) and Sm. Charusila Dassi and others	 In re (4). So far as exemption under section 4(3) (viii) is concerned	 the matter is concluded by a decision of this Court given subsequent to the decision now under appeal. In Commissioner of Income tax vs Venkataswamy Naidu (5)	 this Court held	 reversing the judgment of the High Court of Madras	 that it (1) 	 21 O. (2) (3) 	 327. (4) 	 370. (5) 	 534. 183 was for the assessee to prove that the income sought to be taxed was agricultural income exempt from taxation under section 4(3)(viii). Bhacgwati	 J.	 delivering the ' judgment of the Court observed: " . 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 incometax in respect of what the assessee considered agricultural income	 the assessee had to put before the Income tax Authorities proper materials which would enable them to come to a conclusion that the income which was sought to be assessed was agricultural income. It was not for the Income tax Authorities to prove that it was not agricultural income. It was this wrong approach to the question which vitiated the judgment of the High Court and led it to an erroneous conclusion. " On the inerits	 the question what is agricultural income within section 2(1) of the Act is the subject of a recent decision of this Court in The Commissioner of Income tax	 West Bengal	 Calcutta vs Raja Benoy Kumar Sahas Roy (1). There	 it was held that before an income could be held to be agricultural income	 it must be shown to have been derived from land by agriculture or by one or the other of the operations described in cls. (i) and (ii) of section 2(1)(b) of the Act	 that the term St agriculture " meant	 in its ordinary sense	 cultivation of the field	 that in that sense it would connote such basic operations as tilling of the land	 sowing of trees	 plantation and the like	 and that though subsequent operations such as weeding	 pruning	 watering	 digging the soil around the growth and removing undergrowths could be regarded as agricultural operations when they are taken in conjunction with and as continuation of the basic operations mentioned before	 they could not	 apart from those operations	 be regarded as bearing the character of agricultural operations. (1) ; 	 155	 158	 160. 184 It is only " observed Bhagwati	 J.	 delivering the judgment of the Court	 " if the products are raised from the land by the performance of these basic operations that the subsequent operations attach themselves to the products of the land and acquire the characteristic of agricultural operations. " " But if these basic operations are wanting the subsequent operations do not acquire the characteristic of agricultural operations. " Dealing with trees which grow wild	 Bhagwati	 J.	 observed : " 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 therefrom is not agricultural income. There is no process of agriculture involved in the raising of these products from the land. " The law being thus settled	 in order to decide whether the income received by the respondent by the sale of trees in his forests was agricultural income or not	 the crucial question to be answered is	 were those trees planted by the proprietors of the estate	 or did they grow spontaneously ? If it is the latter	 it would be wholly immaterial that the respondent has maintained a large establishment for the purpose of preserving the forests and assisting in the growth of the trees	 because ex hypothes	 he performed no basic operations for bringing the forests into being. Now	 the Tribunal has clearly found that there were no plantations of trees by the estate authorities worth the name	 and that the trees	 the income from which is the subject matter of the assessments	 must have been of sponta neous growth. That is a finding of fact which is binding on the Court in a reference under section 66(1) of the Act. The learned Judges declined to accept this finding	 because they considered that the Tribunal had not appreciated the true significance of Podu cultivation. That	 in our opinion	 is a misdirection. If the point for decision had been whether the forest was a virgin forest or whether it had subsequently sprung up	 the evidence relating to Podu cultivation would have 185 been very material. But the point for decision is not whether the forests were ancient and primeval	 but whether they had been planted by the estate authorities	 and on that	 the Podu cultivation would have no bearing. As a result of the Podu cultivation	 the original forests would have disappeared. But the question would still remain whether the forest which again sprang up was of spontaneous growth	 or was the result of plantation. Now	 there is no evidence that as and when the jungle had disappeared under Podu cultivation	 the estate intervened and planted trees on the areas thus denuded. On the other hand	 the learned Judges themselves found that after the destruction of the original forests in the process of Podu cultivation	 there was a fresh growth of forests from the stumps of the trees which had been burnt. If that is the fact	 then the new growth is also spontaneous and is not the result of any plantation. In fairness to the learned Judges	 it must be observed that at the time when they heard the reference there was a conflict of judicial opinion on the question whether subsequent operations alone directed to the preservation and improvement of forests would be agricultural operations within section 2(1) of the Act; and the view they took was that such operations when conducted on a large scale as in the present case would be within section 2(1) of the Act. It was in that view that they observed that "it is therefore idle to regard tilling as the sole and indispensable test of agriculture ". The decision of the learned Judges was really based on the view that though trees in the forest had not been planted by the estate authorities	 the latter had performed subequent operations of a substantial character for the maintenance and improvement of the forest	 and that	 in consequence	 the income was agricultural income. This view is no longer tenable in view of the decision of this Court in The Commissioner of Income tax	 West Bengal	 Calcutta vs Raja Benoy Kumar Sahas Roy (1). It is contended by Mr. Viswanatha Sastri for the (1) ; 	 155	 158	 160. 24 186 respondent that on the facts established in the evidence	 the proper conclusion to come to is that the trees sold by the respondent had been planted by the estate authorities	 and that the decision of the High Court that the income thus realised is within the exemption under section 4(3)(viii) could be supported even on the view of law taken in The Commissioner of Income tax	 West Bengal	 Calcutta vs Raja Benoy Kumar Sahas Roy (1). The argument was that there was unimpeachable evidence that the old forests had disappeared under Podu cultivation	 that the estate had been regularly engaged in planting trees at least from the year 1904 as is shown by the accounts of the zamin	 that it was a reasonable inference to make that there had been similar plantations even during the years prior to 1904 notwithstanding that no accounts were produced for those years	 because it would not be reasonable to expect that such accounts would now be available	 that though the amount shown as spent for plantation might not be considerable	 that was understandable when regard is bad to the fact that the agricultural operations were conducted on the hills and not on the plains	 that	 on these facts	 it would be proper to conclude that the forests were in their entirety the result of plantation. It would be ail erroneous approach	 it was argued	 to call upon the assessee to prove tree by tree that it was planted. Now	 these are matters of appreciation of evidence on what is essentially a question of fact	 viz.	 whether the trees were of spontaneous growth or were products of plantation. On this	 the Tribunal has given a clear finding on a consideration of all the material evidence	 and its finding is final and not open to challenge in a reference under section 66 (1) of the Act. Even the learned Judges of the High Court who considered themselves free to review that finding and	 as already pointed out	 without justification	 could only observe that the trees must have mostly grown from the slumps left when the forests were burnt for purposes of Podu cultivations finding which is fatal to the contention now urged for the respondent that they (I) ; 	 155	 158	 160. 187 were the result of plantation. We are of opinion that there are no grounds on which the finding of the Tribunal could be attacked in these proceedings. It remains to deal with one other contention urged on behalf of the respondent	 and that is based on the fact that the amounts spent in the upkeep of the forrests were large in comparison with the receipts therefrom. The following are the figures relating to the forest receipts and expenses for the years with which the present assessments are concerned: Years Receipts Expenses 1942 43 Rs. 438	894 Rs. 174	437 1943 44 Rs. 407	447 Rs. 209	895 1944 45 Rs. 552	122 Rs. 228	830 1945 46 Rs. 372	971 Rs. 247	216 1946 47 Rs. 689	366 Rs. 460	369 The argument is that from the high proportion of the expenses in relation to the receipts it could be inferred that the income from trees planted by the estate formed a substantial portion of the income derived from the forests. And support for this conclusion is sought in the following observations in The Commissioner of Income tax	 West Bengal	 Calcutta vs Raja Benoy Kumar Sahas Roy (1): " 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. " To appreciate the true import of these observations	 we must have regard to the context in which they occur. The facts found in that case were that portions of the forest which was originally of spontaneous growth had gradually been denuded	 that the propritor had planted trees in the areas so denuded	 that this had gone on for a period of over 150 years	 and that therefore " the whole of the income derived from (1) ; 	 155	 158	 160. 188 the forest cannot be treated as non agricultural income ". It was then observed that " 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 a spontaneous growth and how much to trees Planted by the proprietors "	 but that	 in view of the long lapse of time	 it was not desirable to remand the case for enquiry into the matter. Then follow the observations on which the respondent relies	 and when read in the light of the findings that the plantations made by the proprietors were not negligible	 they mean nothing more than that out of the total income a substantial portion was likely to be agricultural income	 and that it was therefore not a fit case for ordering fresh enquiry These observations do not lay down that if considerable amounts are expended in the maintenance of forests	 then it must be held that the trees were planted by the proprietors. They only mean that if a considerable portion of the forests is found to have been planted	 a substantial portion of the forest income may be taken to have been derived therefrom. And this too	 it must be remarked	 is only a presumption of fact	 the strength of which must depend on all the facts found. In the face of the clear finding in the present case that the forests with which the assessment years are concerned were of spontaneous growth	 the observations quoted above can be of no assistance to the respondent. It is scarcely necessary to add that the observations " If the enquiry bad 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 " quoted above cannot be read	 as was sought to be done for the respondent	 as throwing on the Department the burden of showing that the income sought to be taxed was not agricultural income. That	 in their context	 is not the true meaning of the observations	 and the law is as laid down in Commissioner of Income tax vs Venkataswamy Naidu (1) 	 534. 189 In the result	 this appeal is allowed	 the order of the Court below is set aside and the reference is answered in the affirmative. The respondent will pay the costs of the appellant here and in the Court below. Appeal allowed.

The respondent	 the proprietor of an estate	 derived income from the sale of trees growing in his forests and claimed that it was agricultural income as defined in section 2(1) of the Indian Income tax Act	 1922	 and that it was exempt from payment of income tax under section 4(3)(viii). The Appellate Tribunal found that the evidence to show that there was plantation by the estate authorities was meagre and unsubstantial	 that the trees in question must have been of spontaneous growth and that the respondent had failed to establish facts on which he could claim exemption. On reference	 the High Court took the view that though trees in the forest had not been planted by the estate authorities	 the latter had performed subsequent operations of a substantial character for the maintenance and improvement of the forest	 and that the income was	 therefore	 agricultural income. It also held that the onus was on the income tax authorities to prove that the income derived from the sale of trees was not agricultural income and that they had failed to show that the income fell outside the scope of the exemption mentioned in section 4(3)(viii) Of the Act. Held	 that the High Court erred in placing the burden on the income tax authorities to prove that the income sought to be taxed was not agricultural income. The principle has been well established that where a person claims the benefit of an exemption under the provisions of the Act	 he has to establish it. 177 Commissioner of Income tax vs Venkataswamy Naidu	 [1956] 291.T.R. 529	 followed. The question whether the trees were of spontaneous growth or were products of plantation was essentially a question of fact and the finding of the Tribunal on this point was binding on the High Court in a reference under section 66(1) of the Act. Held	 further	 that the income received by the respondent by the sale of trees in his forests was not agricultural income as the trees had not been planted by him	 and that it was immaterial that he had maintained a large establishment for the purpose of preserving the forests and assisting in the growth of the trees. The Commissioner of Income tax	 West Bengal	 Calcutta vs Raja Benoy Kumar Sahas Roy; 	 	 explained and followed.