Agricultural income treatment for toddy sales depends on actual cultivation or land interest, not a mere tapping licence.

Income from toddy tapped from coconut trees is treated as agricultural income only where it accrues to the person who actually cultivates the trees or otherwise carries on the agricultural operations by which they are raised. A mere licence to tap trees and sell toddy, without ownership, leasehold interest, or participation in the agricultural operations, does not convert the later sale proceeds into agricultural income. The tax character therefore depends on the taxpayer's real connection with the land and cultivation, not on a bare right to market the toddy.

---

---

Issues: Whether income derived from toddy tapped from cocoanut trees on revenue-assessed land constitutes agricultural income within the meaning of Section 2(1) of the Income-tax Act.

Analysis: Income from toddy is agricultural income when it is received by the person who actually cultivates the trees or otherwise carries on the agricultural operations by which the trees are raised. A person who merely obtains a licence to tap the trees and sell the toddy, without having produced the trees by agricultural operations or having an interest in the land, does not earn agricultural income from the subsequent sale of that toddy.

Conclusion: Todd y income was held to be agricultural income only in the hands of the actual cultivator, owner, or lessee of the land on which the trees grow, and not in the hands of a mere licensee or subsequent seller.

---