Taxability of timber sale receipts: forest timber proceeds were treated as income absent any specific statutory exemption.

Receipts from the sale of timber cut and removed from forest land were treated as income liable to tax. The Court held that no relevant distinction existed between such receipts and proceeds from the sale of other produce, except where a specific statutory exemption applies, as in the case of agricultural income. In the absence of any exemption covering timber receipts, the amounts realised from the sale of timber trees were not treated as capital accretions but as taxable income.

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Issues: Whether the amounts received from the sale of timber trees constituted income liable to income tax.

Analysis: The receipts arose from the cutting and removal of timber from forest land. The Court drew no relevant distinction between income from the sale of timber and income from the sale of produce such as paddy grown on land, except that agricultural income enjoys a specific statutory exemption. In the absence of any such exemption for timber receipts, the amounts realised from the sale of timber trees were treated as income and not as a non-taxable accretion to capital.

Conclusion: The amounts received by sale of timber trees are income and are liable to income tax.

Ratio Decidendi: Receipts from the sale of timber cut from forest lands are taxable income unless they fall within a specific statutory exemption.

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