SALE OF STANDING TREES

[ROHIT GOEL]

Hi,

If land is purchased with standing trees and later on these trees are sold, would it be right to not treat the income as agriculture income just because basic operations were not performed by assessee himself but by the previous owner?

AI Summary

Debate on Tax Treatment of Income from Selling Standing Trees: Agricultural Income or Not? Legal Opinions Vary. A query was raised about whether income from selling standing trees on purchased land should be treated as agricultural income if the basic operations were performed by the previous owner. Responses varied: one cited a Supreme Court judgment classifying standing trees as immovable property; another suggested a legal agreement for ownership of tree fruits; a third stated it should not be treated as agricultural income; and another differentiated between cutting trees with roots (capital receipts) and from the stem (agricultural income). A detailed legal precedent was discussed, analyzing the definition of agricultural income in relation to casuarina plantations.