Capital receipt treatment for old plantation tree sales: proceeds not taxable and remand refused on the facts.

Sale proceeds from old and uneconomic trees were treated as capital receipts, because the plantations had been cleared for replanting, no latex was available for extraction, and the receipts represented the value of the trees sold rather than agricultural income. On that factual basis, the court distinguished the earlier remand decision as involving a different record and held that no further inquiry by the assessing authority was necessary. The request for remand was rejected and the receipts were held not liable to agricultural income-tax.

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Issues: Whether the sale proceeds from the sale of old and uneconomic trees were capital receipts not exigible to agricultural income-tax, and whether the matter required remand for determining the value of latex and scrap.

Analysis: The sale was found, on the material on record, to relate to plantations that had become almost dry, had been completely removed and cleared for replanting, and no latex was available for extraction at the relevant time. The final fact-finding authority accepted that the receipts represented the value of the trees sold and not income from latex extraction. In these circumstances, the earlier decision directing remand on a different factual basis was held distinguishable, and no further inquiry by the assessing authority was considered necessary.

Conclusion: The sale proceeds were held to be capital in nature and not liable to tax, and the request for remand was rejected.

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