TaxTMI 
TaxTMI 
2009 (4) TMI 483
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....ncome-tax Act accepting the loss returned. Subsequently, the case of the assessee was taken up for scrutiny and notice under section 143(2) of the Act has been issued. After rejecting the stand of the assessee that the sale proceeds of the silver oak trees (shade trees) standing in the coffee estate would not attract the capital gains and following the decision of the Supreme Court in the case of CIT v. Jyotikana Chowdhurani [1957] 32 ITR 705, the Assessing Officer concluded that the sale of shade trees would attract capital gains and accordingly computed the capital gains at 40 per cent. of the sale price. On appeal, the Commissioner of Income-tax (Appeals) while upholding the assessment on capital gains on the sale of shade trees, directe....
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....s like weeding, digging the soil around the growth, removal of undesirable undergrowth, etc., would not per se be regarded as agricultural operations and in order to invest them with the character of agricultural operations, the subsequent operations of weeding, digging etc. must necessarily be in conjunction with and in continuation of the basic operations, which are the effective cause of the products being raised on the land. 6. The Commissioner of Income-tax (Appeals), in his order, has traversed the procedures contained in the publication titled Coffee in India : Planters' Guide published by the Coffee Research Station functioning under the Coffee Board, wherein it was stated that the silver oak trees are commonly used as per....
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....ighted that the appeal against the said judgment was dismissed by the Supreme Court and the order impugned requires no interference in this appeal. 9. We heard the learned counsel on either side and perused the materials available on record. 10. In the assessee's own case in respect of the assessment year 1990-91 the assessee himself offered a sum of Rs. 56,000 as income arising out of the sale of shade trees in his coffee estate for capital gains, but later, filed a revised return seeking exclusion of the said sum on the premise that the trees which were cut and sold by the assessee had been planted by the previous owner of the estate and removal of the said old trees were sought for better yield from the coffee plants ....
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....him are assessable under section 45 of the Income-tax Act, 1961. For reaching such a conclusion, the Division Bench has also relied on the deci-sions in the cases of Travancore Tea Estates Co. Ltd. v. CIT [1974] 93 ITR 314 (Ker), CIT v. Silver Cloud Forest and Plantations [1998] 231 ITR 671 (Mad) and State of Tamil Nadu v. Tmt. Soundara Rajas [2000] 241 ITR 428 (Mad) and has ultimately held that the income derived from the sale of shade trees cut from the estate cannot be regarded as agricultural income and can only be regarded as income of capital nature and exigible to capital gains tax. 12. It is admitted on either side that the appeal filed against that order made in the writ appeal has been dismissed by the Supreme Court. Hen....
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....xtract that portion of the order of the Tribunal, where the assessee conceded that the issue has been covered by an earlier judgment against the assessee. The extract is under : "The only issue involved in this appeal by the assessee is against the consideration of profit on sale of silver oak trees which were shade trees standing in the coffee estate as capital gains and not as agricultural income. 2. At the time of hearing, the counsel for the appellant was fair enough to consider (sic : concede) that the issue involved in this appeal is covered against the assessee and in favour of the Revenue by the decision of the Income-tax Appellate Tribunal, Chennai Bench D in the case of ITO v. Late C. Seshagiri Rao, by l/r Sri ....