1963 PLP 577 (PTD)

S. 2 (1)‑Agricultural income -Forest product‑Income from sale of sal trees from sal forests. With regard to income from the sale of sal trees from the sal forests of the assessee it was found that the whole sal area was divided into plots and all trees on a plot were sold when they were about 15 years old. No tilling of the soil or sowing of the seeds or grafts or watering was done. During the rainy season the new shoots came out from stumps of old trees cut. Forest officers and guards were maintained to prevent new shoots from being damaged by men and cattle. The plots were kept free from leaves and undergrowths to prevent damage to the new shoots. The trees in the plots sold had to be cut according to directions given by assessee's officers during a particular season of the year. There was no breaking up of the soil by tilling or digging, no planting of seeds or saplings, nor any weeding in the ordinary cultivator's sense. The removal of the undergrowth was not by the assessee or at his expense but by villagers who were allowed to clear and take away the undergrowth free of cost: Held, that the operations above‑mentioned were not agricul tural operations and income from the sale of sal trees grown in the sal forests of the assessee was not agricultural income. Commissioner of Agricultural Income‑tax v. Raja Jagadish Chandra Deo Dhabal Deb (1949) 17 I T R 426; Commissioner of Income‑tax v. Jyotikana Chowdhurani (1957) 32 I T R 705; Commis sioner of Income‑tax v. Raja Benoy Kumar Sahas Roy (1957) 32 I T R 466 ; Maharajadhiraj Sir Kameshwar Singh v. Commissioner of Income‑tax (1957) 32 I T R 587 and Raja Benoy Kumar Sahas Roy v. Commissioner of Income‑tax (1953) 24 I T R 70 ref. STATEMENT OF CASE By this application presented on 26th April 1954, the assessee requires the Appellate Tribunal to refer to the High Court under section 66 (1) of the Income‑tax Act certain questions of law said to arise out of the order of the Appellate Tribunal dated 19th February 1954, in I. T. A. No. 479 of 1948‑49. As, in our opinion, a question of law does arise out of the aforesaid order, we hereby draw up the following statement of the case for reference to the High Court. 2. The assessee had income from sale of sal trees grown in assessee's sal forests. He claimed that this income was agricul tural income as defined in section 2 (1) (b) (i) of the Income‑tax Act and hence not assessable to income‑tax. He pointed out that he had been assessed to agricultural income‑tax on this forest income in 1944‑45 and later, on a reference under the Bengal Agricultural Income‑tax Act, the Calcutta High Court held in Commissioner of Agricultural Income‑tax v. Raja Jagadish Chandra Deo Dhabal Deb ((1949) 17 I T R 426), that he was rightly so assessed. It was said that the facts in the present assessment year remain the same as in 1944‑45 assessment. The Department, on the other hand, held that the income from the forest did not come under the definition of agricultural income and was therefore assessable. 3. The relevant admitted facts are that the whole sal area was divided into plots and all trees on a plot were sold when they were about 15 years old. No tilling of the soil or sowing of the seeds or grafts or watering was done. During the rainy season the new shoots came out from stumps of old trees cut. Forest officers and guards were maintained to prevent new shoots from being damaged by men and cattle. The plot was kept free from leaves and undergrowths to prevent damage to the new shoots. The trees in any plot sold had to be cut according to directions given by assessee's officers and during a particular season of the year. Thus no operations were done on the land except that it was kept free of objectionable undergrowth. There was no breaking up of the soil by tilling, or digging, no planting of seeds or saplings, nor any weeding in the ordinary cultivator's sense. The removal of the undergrowth was not by the assessee or at his expense but by villagers who are allowed to clear and take away the undergrowth free of cost. 4. For detailed reasons given in its order which is made a part of the statement of the case as Annexure "A", the Tribunal took support from the remarks of the learned Judges of the Calcutta High Court in the case of Raja Benoy Kumar Sahas Roy v. Commissioner of Income‑tax ((1953) 24 I T R 70), and held that the income from sale of sal trees was not agricultural income within the meaning of section 2 (1) of the Income‑tax Act. On these facts, the following question of law arises: "Whether on the facts and in the circumstances of this case, the income from sale of sal trees in the forests of the assessee was agricultural income within the meaning of section 2 (1) of the Income‑tax Act?". 5. The above statement was sent to the parties for their suggestions and remarks. The assessee accepted the correctness of the statement of facts except the statement of the Tribunal to the effect that "there is no weeding in the ordinary cultivator's sense. The applicant pointed out that undergrowth was removed by the villagers who in lieu of their remuneration got undergrowth as fuel. On the removal of undergrowth the Tribunal's order stated that no undergrowth was removed at the expense of the assessee. This statement is not disputed by the applicant. The Tribunal was of the opinion that the casual removal of undergrowth without any expense to the assessee would not be weeding in the ordinary cultivator's sense. The Commissioner of Income‑tax, the respondent in this case, had no suggestions to make. J. C. Pal for the Assessee. E. R. Meyer and B. L. Pal for the Commissioner. JUDGMENT P. B. MUKHARJI, J.‑This is an income‑tax reference under section 66 (1) of the Income‑tax Act. The question of law raised in the statement of the case is as follows: "Whether on the facts and in the circumstances of this case, the income from sale of sal trees in the forests of the assessee was agricultural income within the meaning of section 2 (1) of the Income‑tax Act ?" The assessee is Raja Jagadish Chandra Deo Dhabal Deb of Chilkigarh. He had income from sale of sal trees grown in his sal forests. He claimed that this income was agricultural income as defined in section 2 (1) (b) (i) of the Income‑tax Act. It is also asserted by the assessee that he was assessed to agricultural income‑tax on this forest income in 1944‑1945 and later on a reference under the Bengal Agricultural Income‑tax Act, the Calcutta High Court in the case reported in Commissioner of Agricultural Income‑tax v. Raja Jagadish Chandra Deo Dhabal Deb ((1949) 17 I T R 426) held that he was rightly so assessed under the Bengal Agricultural Income‑tax Act. The assessee points out that the facts in the present assessment year which is 1942‑1943 are the same as in 1944‑1945. The facts in this case are shortly these: There was no tilling of the soil, no sowing of the seeds or grafts and there was no watering done. During the rainy season new shoots came out from stumps of old trees cut. Forest officers and guards were maintained to prevent new shoots from being damaged by men and cattle. The plot in which the sal trees grew was kept free from leaves and undergrowths to prevent damage to the new shoots. No operations were done on the land except that it was kept free from objectionable undergrowth. It is also found as a fact that there was no breaking up of the soil by tilling or digging. There was no planting of seeds or saplings. There was no weeding in the ordinary cultivator's sense because the removal of the undergrowth was not, in the facts of this case, done by the assessee or at his expense but the villagers were allowed to clear and take away the undergrowth free of cost. The Tribunal held that on those facts, the income from the sale of sal trees was not agricultural income within the meaning of section 2 (1) of the Income‑tax Act. When this assessment was made, the decision of the Supreme Court in Commissioner of Income‑tax v. Raja Benoy Kumar Sahas Roy ((1957) 32 I T R 466), had not been given. Since that decision it is now quite clear that the answer to the question asked must be in the negative on the facts of this case. In other words, the income in the facts of this case was not agricultural income at all. Here‑ there is no proof that the assessee carried on any basic or subsidiary agri cultural operations taken in conjunction with the basic operation so as to bring him within the principle laid down by Bhagwati, J. in Supreme Court at pages 507‑508 of that report. Mere perform ance of subsequent operations on the products of the land, where such products were not raised on the land by the performance of the basic operations, would not be enough to characterise them as agricultural operations. Weeding, digging the soil around the growth and removal of undergrowths are operations which are described in the judgment as subsidiary operations or subsequent operations which by themselves alone would not bring the income within the meaning of agricultural income within the meaning of section 2 (1) of the Income‑tax Act. Two other decisions of the Supreme Court which followed this decision are Maharajadhiraj Sir Kameshwar Singh v. Commissioner of Income‑tax ((1957) 32 I T R 587) and Commissioner of Income‑tax v. Jyotikana Chowdhurani ((1957) 32 I T R 705). In the former case, it was pointed out by the Supreme Court that even though operations in the nature of forestry operations were per formed by the assessee which had the effect of nursing and fostering the growth of such forest trees, they had nothing in common with the basic operations of agriculture and could not constitute agricultural operations unless they formed part and parcel of and integrated themselves with such basic operations. In the second case, the assessee had claimed that she had employed human skill and labour (1) in reservation of blocks of forests and their operation by rotation (2) by marking the trees for felling and (3) by clearing jungles and undergrowths etc. The Supreme Court even there held that, assuming that those operations had been done by the assessee, such operations in forestry were performed after the produce had sprouted from the soil and no human skill and labour were spent by the assessee on the cultivation of the forest land nor were any operations performed on the land itself. In the light of these decisions, the answer seems to follow inevitably. It was argued on behalf of the assessee, however; that the forest in this case was described in the settlement record as "Abadi Sal Jungle". This will appear from the remand report which found certain facts in this case. On the strength of this expression, the argument on behalf of the assessee was that this meant that this forest was a man‑made forest and human labour and skill were employed to plant and grow sal trees there. We do not think that on the facts this argument is at all open to the assessee first because the expression, "Abadi Sal Jungle", was construed and interpreted by the Additional Appellate Commissioner himself as "land for cultivation of sal trees". A land fit for cultivation of sal trees may still remain uncultivated and the fact of actual cultivation for the assessment year must be proved by the assessee to bring himself within the meaning of agricultural income under section 2 (1) of the Income‑tax Act. Nothing has been done by the assessee in that behalf. On the contrary, the facts found showed clearly that no tilling of the soil or sowing of the seeds or grafts or watering was done and certainly no human skill or labour was employed on the land itself within the meaning of the Supreme Court decision which we have just quoted. For these reasons, it must be held that the income from the sale of sal trees in this case was not agricultural income within the meaning of section 2 (1) of the Income‑tax Act and, therefore, the question is answered in the negative. The assessee must pay the costs of this reference. BACHAWAT, J.‑I agree. Question answered in the negative.