TaxTMI 
TaxTMI 
1970 (5) TMI 3
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....3-64 the assessee filed a return showing a net agricultural income of Rs. 12,558.76. When the matter came up for hearing before the Agricultural Income-tax Officer another statement showing an amount of Rs. 43,250.00 as income from teak trees was filed. The Agricultural Income-tax Officer disallowed certain expenses and assessed the income for the year 1963-64 at Rs. 62,021.00. For the assessment year 1964-65 a return was filed declaring a net agricultural income of Rs. 25,733.63. No income was shown from the sale of teak trees. The Agricultural Income-tax Officer found that teak trees had been sold for a lump sum of Rs. 76,500.00 out of which Rs. 43,250.00 had been received in the previous year (1963-64) and he included the said amount in ....
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....owed as deductions by way of expenses for the assessment year 1963-64. The principal point that has to be determined is whether the sale proceeds of the teak trees constituted capital or revenue. It appears to have been common ground before the High Court that the assessee planted the teak trees some time in the year 1946-47. The form of the question itself showed that the trees were cut and completely removed from the land together with their roots for the purpose of planting rubber. There was no question of any further regeneration or growth of the trees which had been cut and removed. In other words there was no possibility of recurring income from these trees. In V. Venugopala Verma Rajah v. Commissioner of Income-tax, the question be....
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....ductive, but it must be one whose object is the production of a definite return excluding anything in the nature of a mere windfall. Once the teak trees were removed together with their roots and there was no prospect of regeneration or of any production of a return therefrom, it could well be said that the source ceased to be one which could produce any income. The Bombay High Court in Commissioner of Income-tax v. N. T. Patwardhan, said that from the point of view of a person engaging himself in the business of sale of trees the capital structure would be not only the land on which the trees stood but also the roots of the trees from which the wood yielded income. If the trees were sold off with the roots the capital structure would be af....