Forest produce as agricultural income where regular forestry operations and human labour show active management of the land.

Sale proceeds from Sal trees were held to constitute agricultural income where the forest was subjected to regular forestry operations involving human agency, skill and labour. The court distinguished income from a virgin forest or spontaneous growth from income generated by organised management of forest land, including planned felling in blocks, protection of new shoots and clearing of undergrowth. It held that agriculture under the Act is wider than mere cultivation, and that actual cultivation in the narrow sense is not indispensable if the land is actively managed in a forestry sense. The income was therefore treated as assessable agricultural income under the Act.

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Issues: Whether the sale proceeds derived from Sal trees standing on the assessee's forest land constituted agricultural income within the meaning of the Bengal Agricultural Income-tax Act, 1944.

Analysis: Agricultural income under the Act was construed in line with the corresponding concept in income-tax law, but the meaning of "agriculture" was held to be wider than mere cultivation. Income from a virgin forest or forest of spontaneous growth was distinguished from income arising out of land on which there had been regular operations in forestry involving human agency, skill and labour. On the findings accepted by the Tribunal, the assessee's forest was managed by planned felling in blocks at fixed intervals, protection of new shoots, clearing of undergrowth and other forestry operations. These facts showed organised human intervention and expenditure of skill and labour upon the land, sufficient to bring the case within the statutory conception of agricultural income.

Conclusion: The sale proceeds of the Sal trees were agricultural income and were liable to assessment under the Bengal Agricultural Income-tax Act, 1944.

Final Conclusion: The reference was answered in the affirmative, with the result that the income from the forest was treated as falling within the agricultural income provision of the Act.

Ratio Decidendi: Income from forest produce is agricultural income where the forest is the subject of regular forestry operations involving human agency, skill and labour on the land; spontaneous growth alone is not enough, but actual cultivation in the narrow sense is not indispensable.

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