1972 (4) TMI 2 - HC - Income Tax

Tax Exemption for Tree Sale Value: High Court Decision

The High Court of Madras ruled that the sale value of specific trees, grown for a specific purpose like providing shade, should not be considered as ... Whether the sale value of albezia trees and the sale value of malavembu trees grown to protect rubber plantations, are includible as taxable receipts of the assessee along with his other agricultural income – question is answered in favour of the assessee Issues:1. Inclusion of sale value of specific trees as taxable receipts along with agricultural income.Analysis:The High Court of Madras addressed the issue of whether the sale value of specific trees should be considered as taxable receipts along with agricultural income. The assessee argued that the trees were planted solely to provide shade to rubber plants, not for commercial exploitation. The Tribunal accepted that the trees were grown for a specific purpose but still deemed the income from their sale as agricultural income. The Tribunal's rationale was that differentiating between income from various trees would complicate tax administration. However, the High Court disagreed, emphasizing the distinction between capital and revenue receipts. Citing a Supreme Court decision, the High Court highlighted that income from trees grown for a specific purpose, such as providing shade, should not be considered agricultural income when sold after becoming useless. The Court set aside the Tribunal's order in light of the Supreme Court's ruling, ruling in favor of the assessee. No costs were awarded in this judgment.