1929 (11) TMI 3

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... to the production of the aloe leaves but it is contended that the (manufacture of the fibre from these leaves constitutes manufacturing process as opposed to an agricultural process be profits from which are not exempt as agricultural income under section 4 sub-section. 3(viii). The aloe plant from which the assessee produces the fibre is one variety of a class of plants indigeneous to India and growing freely in the wild state,. The principal use of these aloe plants is to provide hedges but hitherto they have not been the subject of regular cultivation. It has long been known that the leaves of some varieties could be so treated as to yield a fibre suitable for the manufacture-of rope and matting and villagers have occasionally been fou....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....The question for our decision is whether any part of the profits resulting from the growing of sisal and the manufacture from it of the fibre is taxable, or whether, on the other hand, the whole of the profits are exempt as being purely agricultural income. Now it is perfectly clear from the wording of the section that an agricultural process does not necessarily stop short at the removal of the plant from the soil. In the case of, for example, cereals plants they must be threshed and winnowed in order to produce the grain and the process of threshing and winnowing is one ordinarily employed by the cultivator to render the produce-fit to be taken to market. It is further to be noted that in order to test whether the process employed by the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... punitive work. In other words this instance relied on by the Department does not provide a standard of comparison for the process employed by the assessee. The word "market." In the section implies a real center of economic exchange and the purchase by jails is merely an artificial condition having no relation to a market for agricultural produce. The Department rely upon the decision of the Calcutta High Court in the case of Killing Valley Ten Company Ltd., v Secretary of State for India 1 ITC 54. That case was concerned with the state of affairs in connection with the- manufacture of tea. The assessee employed a process of manufacture applied to the leaf which involved the use of costly machinery and was of a complicated natur....