Slaughter tapping of own rubber trees treated as agricultural income where the receipt reflects produce of land, not tree sale.

Income derived by an owner from slaughter tapping of his own old rubber trees is treated as agricultural income under clause (a) of section 2 of the Kerala Agricultural Income-tax Act, 1950. The decisive distinction is between a person who merely acquires a right to slaughter-tap and an owner who taps his own trees: earlier cases involving purchasers or transferees turned on the absence of an interest in the land and on mixed consideration, including possible capital value of the trees. Where the assessee personally carried out the tapping, the rubber remained produce of land used for agricultural purposes, with no sale of trees or capital component in the receipt.

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Issues: Whether the income derived by the owner from slaughter tapping of old rubber trees is agricultural income within clause (a) of section 2 of the Kerala Agricultural Income-tax Act, 1950.

Analysis: The decisive distinction was between receipts earned by a person who merely acquires a right to slaughter-tap and receipts earned by the owner himself from tapping his own trees. Earlier decisions concerning agreements with purchasers or transferees were treated as turning on the absence of any interest in the land and on the mixed character of the consideration, part of which could be attributable to capital value of the trees. In the present case, the assessee himself carried out the slaughter tapping, and the rubber obtained thereby remained produce of land used for agricultural purposes. Since there was no sale of trees and no capital component in the receipt, the whole of the sale proceeds from the rubber was treated as income derived from land used for agricultural purposes.

Conclusion: The income from the assessee's own slaughter tapping of rubber trees was held to be agricultural income and was chargeable to tax under the Act, in favour of the revenue.

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