1991 (9) TMI 15

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....facture of tea. The Income-tax Officer, having finalised the assessment of the firm for the assessment year 1979-80, 60 per cent. of the income was taken as the income relating to agriculture within the meaning of the Tamil Nadu Agricultural Income-tax Act The Agricultural Income-tax Officer added to this the sale value of timber realised out of silver oak shade trees to the tune of Rs. 52,381. It....

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....arned counsel for the petitioners contended that the shade trees are grown for the purpose of giving protection to the tea plants and, therefore, such shade trees when cut and sold, the sale proceeds whereof would not amount to agricultural income. In State of Kerala v. Karimtharuvi Tea Estate Ltd. [1966] 60 ITR 275 (SC), the assessee had grown gravellia trees for the purpose of providing shade to....

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....ry 25, 1991), found that the view expressed in both the said judgments were not in any way contradictory or conflicting. The Division Bench laid down the ratio as follows (at page 402): " If such trees were grown by them for the purpose of deriving income therefrom, undoubtedly, they use such trees for agricultural purposes and so they used the land upon which such trees were grown by them for ....

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....rown by the assessee for the purpose of earning income by felling and selling the same. The Tribunal has referred to the fact that, in the estate in question, shade trees had not been grown for the protection of the tea plants. Further, the agreement entered into between the assessee and the purchaser of the trees contained the clause as follows : "The entire standing gravellia trees in the tea....