TaxTMI 
TaxTMI 
2018 (12) TMI 274
X X X X Extracts X X X X
X X X X Extracts X X X X
...."I. Natural Justice 1. The learned CIT [A] erred in confirming the order of the Assessing Officer who has passed order without providing copies of documents received from the District Collector, Thane in response to letter dt. 11/11/2016 and also not giving an opportunity for cross examination of the said documents was given, hence the order confirmed by the CIT(A) is bad in law and liable to be quashed. II. Violation of Rule 46A - Additional evidence filed during appellate proceedings, rejected by the CIT(A) 2. The Learned CIT(A) erred in not accepting the Additional evidence filed by the Appellant during the appellate proceedings in the form of certificates issued by the various authorities showing the land was agricultural land. As the said evidences were not available at the time assessment and the assessing officer has not given a reasonable opportunity, hence, additional evidence may be accepted and addition confirmed by the C1T(A) may be deleted. Without prejudice to above, III. Sale of Agricultural Land treated as Capital Assets u/s.2(14) and taxed as Short Term Capital Gain of Rs. 3,98,84,086/- 3. The Learned CIT(A) err....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urchase deed executed on 16.10.2012 with the previous owner that the land in question was never used by the assessee for agricultural activities as no actual cultivation was ever carried out by assessee as well as even by the previous owner from whom the land was purchased by the assessee. The AO also observed that the current purchaser who purchased the plot of land from the assessee has also not purchased the land for agricultural purposes but for real estate development. The AO observed that the assessee has sold the aforesaid land by not valuing the same based on agricultural yield but for real estate development. The AO also observed that the process for converting the said land into a non-agricultural land, was initiated way before the sale agreement was executed by the assessee on 31.10.2013 as could be seen from the clearance certificate issued by Forest Department dated 25.10.2013 and Executive Engineer, Bhatsa Canal Division no. 1, Tal Shahapur dated 07.10.2013. The assessee was asked by the AO to explain the same . The assessee submitted that the land in question is an agricultural land keeping in view provisions of Section 2(14) of the 1961 Act. It referred to amended p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d sale agreement. The assessee relied upon decision of Hon‟ble Gujarat High Court in the case of CIT v. Manilal Somnath (1977) 106 ITR 917(Guj). The assessee submitted that it is the buyer who obtained the permission for converting agricultural land into non-agricultural land and it is the buyer Mr. Sachin S. Lodha who made an application for conversion of land on 02.08.2014 whereas the property was sold on 31.10.2013 . It was submitted that conversion order was passed by District Collector , Thane on 11.11.2014. It was submitted that the assessee only obtained clarification from Forest Department whether land is under forest area. The assessee submitted that it obtained clarification from Town Planning Department as to whether any proposal for development of that land by Government is on anvil. The assessee submitted that in the revenue records , land is agricultural and never sought to be used for non agricultural purpose by the assessee till it was sold by the assessee and hence the same is to be treated as agricultural land , even though no agricultural income was shown by the assessee in the return of income filed with the Revenue and hence no capital gains was chargeabl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee has not produced any documents to prove that the land in question was used for agricultural purposes. The AO also observed that the assessee has before the sale of the land in question to Shri Swapnil Shende and Shri Sachin Lodha , initiated the procedure required to obtain the documents required for acquiring permission for conversion of the said land to Non-agricultural purposes . The AO observed that the assessee has obtained following documents before the date of sale of land on 31.10.2013 , as under:- a) Zone Certificate issued by the Asstt. Director, Town Planning, Thane dated 23/08/2013 issued on the request of the assessee, wherein it has been mentioned that the said land has not been acquired or earmarked for any regional development. b) Clearance Certificate dated 25/10/2013 issued by the Forest Department to the effect that the said land has not been acquired or designated as Forest land. c) No Objection Certificate dated 07/10/2013 issued by the Executive Engineer, Bhatsa Dam Division No 1 to the effect that the said land did not fall within the catchment area of Bhatsa Dam. The AO during the course of assessment proceedings also obtaine....
X X X X Extracts X X X X
X X X X Extracts X X X X
....w of the above, the contention of the assessee to treat the sale consideration on sale of the said land as receipts on sale of 'agricultural land‟ and therefore exempt from being treated as a 'capital assets‟ not liable to be taxed under the head 'Capital Gain‟ cannot be acceded to and is therefore rejected. 9. In the assessee‟s case , the said land was acquired vide purchase agreement executed on 16/10/2012 and the same was sold as on 31/10/2013. Thus, on the basis of the holding period of the said land, the assessee is taken to have earned Short Term Capital Gain and is taxed accordingly. Therefore, the exemption claimed by the assessee u/s 10(37)(ii) of the Income-tax Act,1961 for an amount of Rs. 3,98,84,086/- is disallowed and the same is taxed as Short Term Capital Gain of the assessee...." 4. Aggrieved by the assessment order dated 22.12.2016 framed by the AO u/s 143(3) of the 1961 Act, the assessee filed first appeal before the Ld. CIT(A). The assessee reiterated its submissions before learned CIT(A) as were made before the AO which are not repeated. The assessee also submitted before learned CIT(A) that the said land was sold by the asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vidences to support its contentions of cultivation of land and other facts and also directed the assessee to produce concerned persons before learned CIT(A) who have issued certificates certifying that the land under cultivation was an agricultural land. The assessee did not furnish any credible evidences which could prove that land under cultivation was an agricultural land nor the assessee produced these parties who had issued certificates, affidavits and letters regarding claim that the land was an agricultural land . The Learned CIT(A) rejected the contentions of the assessee and refused to admit additional evidences on the grounds that it did not satisfy the conditions prescribed under Rule 46A of the Income-tax Rules, 1962. The Ld. CIT(A) dismissed the appeal of the assessee by holding as under, vide appellate order dated 27.02.2018:- " 4. Aggrieved with the disallowance of claim of Rs. 3,98,84,086/-, the appellant preferred the present appeal and raised the above grounds of appeal. During the course of appellate proceedings, the Ld. AR of the appellant, by and large, reiterated the same submissions/ arguments, as had been made before the AO, during the course of ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the said land, certificate dated 6.1.2017 from Shahapur Agriculture produce committee to certify that grass is an agriculture product, certificate dated 19.4,2017 from Tehsildar certifying that the land under dispute was an agricultural land, certificate dated 17.1.2008 from Sub-registrar stamp confirming that the land was an agricultural land and xerox copy of letter dated 23.2.2018 from Sachin Lodha, buyer, stating that he had requested to obtain the above certificates and accordingly requested to admit the same under rule 46A of the IT Rule, 1962. 4.2 In order to ascertain the genuineness of above claim, vide order sheet noting dated 16.2.2018, the Ld. AR. was requested to furnish credible documents regarding cultivation of land and other facts and was also requested to produce the concerned persons who have issued various certificates, certifying the fact that the land under dispute is an agricultural land. In compliance the Ld. AR neither could furnish any credible evidences which could establish the fact that the land under dispute is an agricultural land nor could produce these persons who had issued various certificates / letters / affidavits regarding their clai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to cost of cultivation, therefore, income from agriculture was not declared in the returns of income filed with the department. The Ld. AR could not bring any evidence on record, in respect of above claims and also could not explain the reasons for contradictions at assessment stage vis-a-vis at appellate stage. These contentions of the appellant are nothing but fabricated for claiming benefit of agricultural land. As per above details it is seen that the appellant had sold the land for Rs. 4.10 crores (29.10.2013) i.e. 34.17 times of cost i.e. Rs. 12 lacs (16.10.2012), thereby earned huge profit of Rs. 3.98 crores by investing meager amount of Rs. 12 lacs, within a span of no times. On the other hand the poor farmer was paid only Rs. 12 lacs for the said land. 5. I have carefully considered the facts of the case, the findings of the AO, submissions of the Ld. AR and material placed on record. From the facts of the case it is noticed that the appellant derives income from supply of building material and rental income from three properties. During the year under appeal, the appellant had sold a land admeasuring 5.22 Acres on 31.10.2013, situated at Shahapur, Dist. Thane, fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e buyer also asked the appellant to apply for NA. As per the understanding between the appellant and the buyer, the appellant obtained clearance from the Asstt. Director, Town Planning on 23.8.2013, Clearance Certificate dated 25.10.2013 from Forest Department and No objection Certificate dated 17.10.2013 from Executive Engineer, Bhatsa Division No. 1, before selling the land to the developer. 5.2 It is further noticed that the application filed by the appellant in the office of the Collector, for converting land use to non-agricultural land, was also processed and was given understanding that in view of the certificates, the land under dispute will be converted into N.A. Accordingly, the land under dispute was sold to Shri Swapnil Shende and Sachin Lodha on 31.10.2013, for total consideration of Rs. 4,10,00,000/-, as against the market value of Rs. 3,43,43,000/-, on which stamp duty of Rs. 16,40,000/- was also paid on 29.10.2013. It is pertinent to mention here that on 16.10.2012, the land under dispute was registered in the name of appellant, in view of the above irrevocable power of Attorney dated 23.9.2008, obtained from the original owner i.e. Shri Shankar Tukaram, by....
X X X X Extracts X X X X
X X X X Extracts X X X X
....34.17 times of the purchase price and still avoiding the payment of tax, by fabricating the claim of agricultural land, in-spite of the fact that the same was never cultivated and was never intended to be used for agricultural purposes. 5.4 In view of the change of stand by the AR, that paddy & other crops were cultivated, during appellate proceedings the appellant was required to furnish documentary evidences regarding labor expenses, seed expenses, fertilizer expenses, cultivation expenses, harvesting expenses, marketing expenses, sales bills along with name and address of the person who had cultivated the land and produce them for verification. In compliance, the appellant could not furnish these documents and merely stated that the land under dispute was never cultivated but was located in rural area, therefore, liable to be treated as agricultural land. As regard the request for cross verifying the District Collector, Thane, for supplying various correspondences /documents / NA certificates, etc. to AO is concerned it was explained that the said documents are available in the public domain and relate to sale of your land and the same were in the knowledge of the appel....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../- only. It is further held that the price at which the said land was sold had appreciated multiple times, within a span of few months, itself indicates the land falls within the purview of taxable gain. It is pertinent to mention here that the crop sold as 'grass' in 7/12 Extract, will not classify the same as agricultural land, in view of the above facts. Keeping in mind the various factors such as holding periods, intention of purchase and sales, etc, in my considered view, the appellant had carried out trading of adventure in nature, for harvesting maximum profit and not for the investment in the land for agricultural purposes. In this regard, the reliance is placed on the ratio laid down in the following cases: - A CIT Vs Subramaniam Vadivel (TS-206-ITAT) (2013) (CHNY) "Land even if situated outside municipal limits or in remote villages, constitutes capital asset absent any agricultural operations; Sale consideration, thus taxable as capital gains; Mere bifurcation of land in revenue records as 'agricultural' would not make it so; Agricultural history of land is not the only test to be applied to decide the character at the time of sale; Land....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n'ble SC has held that "the HC was right in holding that the said land was not an agricultural land at the time of its sale and that the income arising from its sale was not exempt from the capital gain". While giving its decision Hon'ble SC has referred to various judgments on the issue viz. CIT K Siddharth J. Desai [1983] 139 ITR 628 (Guj.), CIT vs. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 (SC), CWT vs. Officer-in-charge (Court of wards) [1976] 105 ITR 133 (SC), T. Sarojini Devi Vs. T. Sri Krishna AIR 1944 Mad. 401 and CIT vs. V.A. Trivedi [1988] 172 ITR 95 (Bom.). CWT vs. Officer-in-charge (court of wards) [1976] 105 ITR 133 (SC) popularly known as Begumpet Palace case-In this case., the Constitution Bench of the S. C., inter-alia, held that; "(a) ....The idea behind exempting the agricultural land is to encourage cultivation of land and the agricultural operatlons. In the other words this exemption had to be necessarily given a more restricted meaning than the very wide ambit given to it by the Full Bench of the Andhra Pradesh High Court (b) What is really required to be shown is the connection with an agricultural purpose and user a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hed or tilled? Whether the owner meant or intended to use it for agricultural purposes. (8) Whether the land was situated in a developed area? Whether its physical characteristics, surrounding situation and use of the land adjoining area were such as would indicate that the land was agricultural. (9) Whether the land itself was developed by plotting and providing roads and other facilities. (10) Whether there was any previous sales of portions of land for non-agricultural use? 11) Whether permission u/s 63 of the Bombay Tenancy and Agricultural Lands Act, was obtained because the sale or intended sale was in favour of a non-agriculturist? If so, whether the sale or intended sale to such non-agriculturist was for non-agricultural or agricultural user? (12) Whether the land was sold on yardage or on acreage basis? (13) Whether an agriculturist would purchase the land for agricultural purpose at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield. At the risk of repetition, we may mention that not all these....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee. On a totality of the assessment of the fact and circumstances of the case and on the material on record, the conclusion arrived at by the Tribunal was correct. The assessee, was at least so far as the transactions in question were concerned, carrying on business or an adventure in the nature of trade, and that, therefore, the profit which accrued from such transactions would be taxable as business income. Badrilal Bholaram Vs CIT (MP) 139 ITR 207 CIT Vs B Narasimha Reddy (Karnataka) 150ITR 347 CIT Vs M Krishna Rao (AP) 120 ITR 101 - Land purchased had potentiality of being developed into building site - No agricultural operations were carried out on land by the assessee -Adventure in the nature of trade. 5.7 In view of the above discussion, in my considered view, the AO has rightly assessed the gain from the sale of open land as STCG, therefore, sustained. The AO, however, is directed to allow the claim of expense of Rs. 60,660/-, against stamp duty and registration charges, incurred against purchase of land. All the grounds of appeal are decided accordingly. In result the appeal is partly allowed." 5. Aggrieved by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... book wherein Certificate(incl. English translation) dated 22.07.2016 of Grampanchayat, Khardi is placed wherein it is certified that the distance of Taluka place Shahpur is 20 K.M. from Khardi Grampanchayat. Our attention was also drawn to relevant paras of Ld. CIT(A) appellate order to contend that Ld. CIT(A) rejected the additional evidences filed by the assessee. The assessee has also filed written submissions before the tribunal which is also taken on record. 6. The Ld. DR on the other hand submitted that matter can be set aside and restored to the file of AO for denovo determination of the issue on merits in accordance with law . The learned DR would rely on the appellate order passed by learned CIT(A). 7. We have considered rival contentions and perused the material on record including orders of authorities below and paper book filed by the assessee. We have observed that the assessee is engaged in the business of building material . The case of the assessee was selected by Revenue for framing scrutiny assessment u/s 143(3) read with Section 143(2) of the 1961 Act. During the impugned assessment year under consideration, the assessee sold an plot of land situated at vi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Shankar Tukaram on or around the time of execution of aforesaid registered purchase agreement and irrevocable power of attorney both dated 23.09.2008 by seller Mr Shankar Tukaram in favour of the assessee , out of total consideration of Rs. 12,00,000/- towards the said land , while balance amount of Rs. 1,00,000/- was paid by the assessee to said Mr Shankar Tukaram on 16.10.2012 in cash when final registered purchase deed with respect to aforesaid land was executed in favour of the assessee by the seller . It is claimed by the assessee that the stamp duty of Rs. 48,000/- and registration fee of Rs. 12,660/- was also paid by the assessee at the time when registered purchase agreement and irrevocable power of attorney was executed in favour of the assessee by the seller Mr Shankar Tukaram on 23-09-2008. It is also claimed that only differential stamp duty of Rs. 100/- and registration charges of Rs. 780/- was paid by the assessee when the purchase deed was finally registered on 16.10.2012 in favour of the assessee by the seller, Mr Shankar Tukaram. The provisions of Section 53A of the Transfer of Property Act,1882 was invoked by the assessee to contend that the land was transferred t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by Talathi , village Khadrdi appended to and forming part of purchase deed dated 23.09.2008 and as well 7/12 extract issued on 26.07.2013 by Talathi , Village Kardi appended to and forming part of sale deed dated 31.10.2013 filed by the assessee with respect to said land which showed the said land on which grass was grown. The Revenue has observed that grass grows spontaneously on vacant land for which no agricultural operations are required to be carried on and hence it cannot be said that the said land was used for agricultural purposes. The authorities below have also observed that during the period of three years beginning with assessment year(s) 2012-13 to 2014-15 the assessee did not show any income from agriculture in the return of income filed by the assessee with Revenue which as per Revenue is an strong indicator that no agricultural activities whatsoever were carried on by the assessee on the said land. The assessee is claiming that it grew grass, rice and plantation on the said land which is disputed by Revenue , as also that the assessee did not produce any documentary evidences to show that cultivation activities were carried on by him on the said land as no invoices ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h spontaneous grass was grown which cannot be categorised as a land which was used for agricultural activities while the assessee has bought and sold the said land for commercial development purposes to earn profit on the sale of land . It was concluded by the authorities below that the intention of the assessee at the time of buying the land as well selling the land was always to make profits from the sale of land as the assessee was fully aware of the commercial value of the said plot of land. The authorities below have also come to the conclusion that the buyer Mr Swapnil Shende and Mr Sachin Lodha also bought aforesaid land for commercial development purposes and not for the purpose of carrying on agricultural activities on the said land. The authorities below also observed that registered purchase agreement for transfer of land in favour of the assessee was finally executed by the seller, Mr Shankar Tukaram on 16.10.2012 and the Revenue did not accepted the initial registered purchase agreements and irrevocable power of attorney both dated 23.09.2008 executed by seller, Mr Shankar Tukaram in favour of the assessee. The land was undisputedly sold by the assessee on 31.10.2013 t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ain persons/authorities to prejudice assessee, the copies of said relied upon documents are to be forwarded/furnished to the assessee for rebuttal before any prejudice is caused to the assessee by relying on those documents. The assessee in order to substantiate its contentions that the said land was used for agricultural purposes has submitted additional evidences before learned CIT(A), as under: a) Letter from Sub-Registrar dated 17th January 2018 b) Copy of affidavit dated 25.01.2017 of Mr Vijay Shankar Son of Mr Shankar Tukaram, owner of land from whom the assessee purchased the land, averring that agricultural activities were carried out on the said land. c) Certificate dated 06.01.2017 from Shahpur Agricultural Produce Committee to certify that grass is an agricultural product d) Certificate dated 19.04.2017 from Tehsildar certifying that the land under dispute was an agricultural land. e) Certificate dated 17.01.2018 from Sub-Registrar stamp confirming that the land was an agricultural land. f) Xerox copy of the letter dated 23.02.2018 from Mr. Sachin Lodha , buyer of the land stating that he requested the assessee to obt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Civil Appeal No. 3327 of 2007 decided on 30th July 2018, wherein the Constitutional Bench held in favour of Revenue by holding as under: "52.To sum up, we answer the reference holding as under (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands overruled." Thus, since the assessee is seeking exemption from income-tax on the gains arising from the sale of aforesaid land claiming the same to be agricultural land used for agricultural purposes by the assessee during the period when it was held by the assessee, the onus is on the assessee to prove that his case strictly comes within the parameters of the exemption clauses as ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The only enquiry which would therefore be relevant is whether the income in question is agricultural income within the terms of the definition thereof and that would have to be determined in each case by the Court having regard to the facts and circumstances of the particular case before it. In order that an income derived by the assessee should fall within the definition of agricultural income two conditions are necessary to be satisfied and they are : (i) that the land from which it is derived should be used for agricultural purposes and is either assessed for land revenue in the taxable territories or is subject to local rates assessed and collected by the officers of the Government as such ; and (ii) that the income should be derived from such land by agriculture or by one or the other of the operations described in clauses (ii) and (iii) of section 2(1)( b) of the Indian Income-tax Act. It was at one time thought that the assessment of the land to land revenue in the taxable territories was intended to exempt the income derived from that land from liability for payment of income-tax altogether and that theory was based on the assumption that an assessee who....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ong ago to facilitate collection of revenue. Income derived from the produce of the land having been subjected to the payment of the annual land revenue, it was thought inequitable to subject the same income again to annual income-tax. Hence the exemption of the agricultural income of assessed lands or lands whose revenue had been remitted either in whole or in part, as in the case of inams. Mines, minerals, and quarries having been reserved by the State, at any rate in respect of lands other than those comprised in a permanently settled estate, income derived from such sources was not exempted from income-tax. The revenue assessment was based on the quality of the soil and the income derived from the produce of the lands, and therefore the exemption from income-tax was limited to agricultural income derived from assessed lands. Such is the reason for exemption from income-tax of agricultural income". Whatever may have been the genesis of the exemption of agricultural income from income-tax, the liability to pay land revenue or fixed peishkush under Regulation XXV of 1802 was not considered by Rankin, J., as a deterrent against the levy of income-tax in appropriate cases, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... subject to local rates assessed and collected by the officers of the Government as such is merely an indication that the land is an agricultural land as distinguished from land which can be used for agricultural purposes but carries the matter no further. We have, therefore, to consider when it can be said that the land is used for agricultural purposes or agricultural operations are performed on it. Agriculture is the basic idea underlying the expressions "agricultural purposes" and "agricultural operations" and it is pertinent therefore to enquire what is the connotation of the term "agriculture". As we have noted above, the primary sense in which the term agriculture is understood is agar-field and cultra-cultivation, i.e., the cultivation of the field, and if the term is understood only in that sense agriculture would be restricted only to cultivation of the land in the strict sense of the term meaning thereby, tilling of the land, sowing of the seeds, planting and similar operations on the land. They would be the basic operations and would require the expenditure of human skill and labour upon the land itself. There are however other operations which have got to be r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e on the land but also includes the subsequent operations set out above all of which operations, basic as well as subsequent, form one integrated activity of the agriculturist and the term "agriculture" has got to be understood as connoting this integrated activity of the agriculturist. One cannot dissociate the basic operations from the subsequent operations and say that the subsequent operations, even though they are divorced from the basic operations can constitute agricultural operations by themselves. If this intregated activity which constitutes agriculture is undertaken and performed in regard to any land that land can be said to have been used for "agricultural purposes" and the income derived therefrom can be said to be "agricultural income" derived from the land by agriculture. In considering the connotation of the term "agriculture" we have so far thought of cultivation of land in the wider sense as comprising within its scope the basic as well as the subsequent operations described above, regardless of the nature of the products raised on the land. These products may be grain or vegetables or fruits which are necessary for the sustenance of human beings includi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the land, there is no warrant at all for extending it to all activities which have relation to the land or are in any way connected with the land. The use of the word agriculture in regard to such activities would certainly be a distortion of the term. A critical examination of the definition of "agricultural income" as given in section 2(1) of the Indian Income-tax Act and the relevant provisions of the several Agricultural Income-tax Acts of the various States also lends support to this position. In the first instance, it is defined as rent or revenue derived from land which is used for agricultural purposes ; and it is next defined as income derived from such land by agriculture or by the activities described in clauses (ii) and (iii) of section 2(1)( b) of the Act. These activities are postulated to be performed by the cultivator or receiver of rent-in kind of such land in regard to the products raised or received by him which necessarily means the produce raised on the land either by himself or by the actual cultivator of the land who pays such rent-in-kind to him. If produce raised or received by the cultivator or receiver of rent-in-kind is thus made the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oducts which grow wild on the land or are of spontaneous growth not involving any human labour or skill upon the land are not products of agriculture and the income derived therefrom is not agricultural income. There is no process of agriculture involved in the raising of these products from the land. There are no agricultural operations performed by the assessee in respect of the same, and the only work which the assessee performs here is that of collecting the produce and consuming and marketing the same. No agricultural operations have been performed and there is no question at all of the income derived therefrom being agricultural income within the definition given in section 2(1) of the Indian Income-tax Act. Where, however, the assessee performs subsequent operations on these products of land which are of wild or spontaneous growth, the nature of those operations would have to be determined in the light of the principles enunciated above. Applying these principles to the facts of the present case, we no doubt start with the finding that the forest in question was of spontaneous growth. If there were no other facts found, that would entail the conclusion that....