TaxTMI 
TaxTMI 
TaxTMI 
1972 (3) TMI 17
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....s correct?" The year of assessment is 1965-66 and the corresponding accounting period is that which ended on March 31, 1965. The assessee received certain amounts by selling rubber obtained on slaughter-tapping of rubber trees which stood on the estate of M/s. Woodland Estates Ltd. The question is whether these amounts can be said to be agricultural income within the meaning of that expression as defined in section 2(a) of the Act. It is agreed before us that the question has to be answered in the light of the provisions in the contract between the assessee and the Woodland Estates Ltd., contained in the agreement dated March 23, 1964, which is part of the statement of the case and is in the paper book in I.T.R. No. 14 of 1970. A single s....
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....do all such preparatory work for the proposed replanting of rubber." The definition in section 2(a) of the Act is in these terms: "2. Definitions.- In this Act, unless there is anything repugnant in the subject or context,- (a) 'agricultural income' means- (1) any rent or revenue derived from land which is used for agricultural purposes and is either assessed to land revenue in the State or subject to a local rate assessed and collected by officers of the State Government as such; (2) any income derived from such land by-- (i) agriculture, or (ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fi....
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.... section 2(1) of the Indian Income-tax Act, 1922. Though the decision is not very helpful for deciding the question before us, we consider that a passage from it is helpful for understanding the general import of the definition of the term "agricultural income". We may extract a passage from that decision : "The word 'derived' is not a term of art. Its use in the definition indeed demands an enquiry into the genealogy of the product. But the enquiry should stop as soon as the effective source is discovered. In the genealogical tree of the interest land indeed appears in the second degree, but the immediate and effective source is rent, which has suffered the accident of non-payment. And rent is not land within the meaning of the definition....
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....and and continue to afford income to the transferee, the assessee before us. The provisions in the agreement that we have read would clearly show that the definite intention was to have the trees annihilated. There was an out and out sale of the trees and considering the extent of the land on which the trees stood, 303 acres, it is quite conceivable that the removing of the trees would take considerable time and the provisions in the agreement that the assessee had three years time to remove them does not at all imply any intention that the trees should continue to receive nourishment from the land and afford agricultural income to the assessee. The most apt passage that we have been able to find which can be applied to the facts of the cas....
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.... for the assessee. Counsel for the revenue urged that the propositions stated in the above decisions have been stated too broadly. We need not consider this aspect because on the facts of the case, it is not possible to say that the amounts received by slaughter-tapping the trees which the assessee purchased under the agreement dated March 23, 1964, are agricultural income. We must refer to one other aspect. When the owner of the land who by undertaking agricultural operations had cultivated trees and when he derived income by slaughter-tapping and finally sold the trees, the question might arise as to whether the entire amount received by slaughter-tapping and sale of the trees later is agricultural income. The question has been answered ....