1956 (3) TMI 22

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....t 11 months from 7th May, 1951, to 31st March, 1952. There were clauses in the contract, Exhibit A-1, prohibiting the assessee from cutting all the bamboos in a cluster or tender shoots less than a year old. The bamboos were of spontaneous growth in the Government forest. There were restrictions imposed on the assessee and his men and servants with regard to the entry into the forest and egress out of it when cutting bamboos. The assessee paid a lump sum to the Govern- ment as consideration for the right of cutting the bamboos from the forest during the stipulated period. The assessee issued permits to cut and remove the bamboos to various persons for money received, the aggregate of such sums amounting to Rs. 41,305-8-0. The assessee objec....

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....f the Income-tax Act income from forests derived by sale of wood or trees or other produce has been held not to be agricultural income, Mustafa Ali Khan v. Commissioner of Income-tax(2), and a person who takes contracts in natural forests for the purposes of cutting down and selling timber has been held not to be earning agricultural income: Commissioner of Income-tax, Madras v. Manavedan(3). The juxtaposition of the words "agricultural" and "horticultural" and the reference to the "produce grown" in the proviso to section 2(1) of the Act indicate that what is exempted from the "turnover" by the proviso is the produce of land resulting from the application of human effort to the land in the shape of manuring, tilling, ploughing, planting, s....

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.... bamboo trees was merely ancillary to the real purpose of the contract and did not create any interest in land in the assessee. This is a case where, to quote Lord Coleridge, C.J., in Marshall v. Green(1), "the parties agree that the thing sold shall be immediately withdrawn from the land, the land is to be considered as a mere warehouse of the thing sold, and the contract is for goods". The position is the same as if the bamboos had been stored by the Government in its godown and the assessee had bought the bamboos for a price with the implied or incidental right to go and fetch them and so reduce them into his possession and ownership. Exhibit A-1 is in substance a contract of sale of bamboos fit for cutting in certain coupes in a Governm....