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Commissioner of Income- Tax Vs. K.E. Sundara Mudaliar and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberCase Referred Nos. 11 and 12 of 1947 and 1 of 1948
Judge
Reported inAIR1950Mad566; [1950]18ITR259(Mad)
ActsIncome Tax Act, 1922 - Sections 1, 2 and 2(1); Code of Civil Procedure (CPC) ; Court-fees Act - Sections 1
AppellantCommissioner of Income- Tax
RespondentK.E. Sundara Mudaliar and ors.
Appellant AdvocateC.S. Rama Rao Sahib, Adv.
Respondent AdvocateP. Krishnamachari, ; M. Subbaraya Iyer, ; K. Nilakantan, ; S. Swaminathan, ; K. Rajah Iyer, ; K. Srinivasan, ;T.V. Viswanatha Iyer ; and P. Suryanarayana, Advs.
Cases ReferredPattamahadevi v. Municipal Council
Excerpt:
direct taxation - income - sections 2 and 4 of income tax act, 1922 - whether income derived from casuarina plantations is agricultural income under section 2 (1) - whatever is grown on land aided by human labour and effort and whatever does not grow wild or spontaneously would be agricultural product - held, income derived from casuarina plantations is agricultural income exempted under section 4 (3). - - the test laid down in that decision is satisfied in the present case as the trees did not grow on the land spontaneously but were the result of cultivation of land, expenditure and skill and labour on it by the assessee. when exemption from income-tax is sought under section 4 (3) (viii), income-tax act, for 'agricultural income',the primary condition must be satisfied that the.....satyanarayana rao, j.1. the only question that has been referred in these cases is :'whether on the facts and in the circumstances of this case, the income derived from casuarina plantations is agricultural income within the meaning of section 2 (1), income-tax act.' we understand that besides these cases in which a reference has been made, there are also other cases in which similar questions have been raised and are pending decision. the appellate tribunal was of opinion that the income derived from casuarina plantations is 'agricultural income' which is exempted from taxation under section 4 (3) (viii), income tax act.2. the facts are not seriously in dispute; and it is also common knowledge that in order to raise casuarina plantation it is necessary to prepare the soil, raise.....
Judgment:

Satyanarayana Rao, J.

1. The only question that has been referred in these cases is :

'Whether on the facts and in the circumstances of this case, the income derived from casuarina plantations is agricultural income within the meaning of Section 2 (1), Income-tax Act.'

We understand that besides these cases in which a reference has been made, there are also other cases in which similar questions have been raised and are pending decision. The appellate tribunal was of opinion that the income derived from casuarina plantations is 'agricultural income' which is exempted from taxation under section 4 (3) (viii), Income tax Act.

2. The facts are not seriously in dispute; and it is also common knowledge that in order to raise casuarina plantation it is necessary to prepare the soil, raise seedlings, cultivate the land and plant them. After the plantation, the plants require watering for periods, ranging from 3 to 5 years according to the nature and quality of the soil. Even after the expiry of the period of three years or five years, the trees in order to facilitate their growth require pruning. The frees are cut usually 8 to 10 years after they are transplanted. It is therefore an undoubted fact that the tillage of the soil and the employment of labour and skill are required to grow a plantation. The wood of the trees is used mostly either for fuel or for building purposes. The question is whether the income realised by the sale of the trees after they are cut is agricultural income within the meaning of Section 2 (1) of the Act and exempt from taxation under Section 4 (3) (viii).

3. The Act defines 'agricultural income' in these terms : --

'Agricultural income' means --(a) any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land revenue in British India or subject to a local rate assessed and collected by the officers of the Crown as such;

(b) 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 fit to be taken to market, or

(iii) the sale by a cultivator or receiver of rent in kind of the produce raised or received by him, in respect of which, no process has been performed other than a process of the nature described in Sub-clause (ii).' Under both the Clauses (a) and (b) of this definition the income must be derived from land which is used for agricultural purposes.

4. The meaning of the expression 'agricultural purposes' was the subject-matter of conflicting decisions of Courts under various statutes in which the expression in some form or other occurred. It may not be quite legitimate to rely largely upon the decisions which have construed a similar or analogous expression in other Acts for interpreting the expression used in Section 2 (1), Income-tax Act. The recent decision of the Privy Council in Mustafa Ali v Commr. of Income-tax, U. P. Ajmer, , to some extent has paved the way to evolve a clearer definition of the expression. In this decision the Judicial Committee had to consider Section 2 (1), Income-tax Act, in order to determine whether the income from forest trees was agricultural income and therefore exempt from taxation The trees in question were of spontaneous growth and there was nothing to indicate that the assessee carried on any regular operation in forestry. Their Lordships of the Judicial Committee approved the test laid down by this Court in Gangadhara Rama Rao v Commissioner of Income tax. I. L. R. (1946) Mad. 745: A.I.R. 1947 Mad 157 and also by the Chief Court of Oudh, and the High Court of Allahabad. For the purpose of disposing of the appeal before their Lordships, they laid down at p. 277 of the report that, ''though it must always be difficult to draw the line, yet, unless there is some measure of cultivation of the land, some expenditure of skill and labour on it, it cannot be said to be used for agricultural purposes within the meaning of the Income tax Act.' Their Lordships also expressed the opinion that no assistance is derived from the meaning ascribed to the word 'agriculture' in other statutes. Their Lordships, however, did not decide the question whether even if the trees planted on the land and cultivated in the regular course of arboriculture, the land could be said to be used for agricultural purposes as it was not necessary for the decision of the case before their Lordships. It is that question that is raised in this reference. The test laid down in that decision is satisfied in the present case as the trees did not grow on the land spontaneously but were the result of cultivation of land, expenditure and skill and labour on it by the assessee. Even if the trees were raised by human labour on the land, unless the purpose was agriculture, the definition would not apply and the exemption does not operate. The land according to the definition should be used for agricultural purpose.

5. Is the raising of casuarina plantation on the land an agricultural purpose According to the Concise Oxford Dictionary 'agriculture' means 'cultivation of the soil,' Webster's dictionary gives the meaning of 'agriculture' as 'farm, horciculture forestry, butter and cheese making etc.' There are also other dictionary meanings given to the word which have been collected by Mukerjee J. in a recent judgment of the Calcutta High Court in Commissioner of Agricultural Income-tax v. Jagidish Chandra, Deo : [1949]17ITR426(Cal) . From an examination of these meanings, it is clear that the word is used in a very general sense and not confined, as contended by Mr. Rama Rao Sahib on behalf of the Income-tax Commissioner, to either raising of food crops, or deriving fruit or other produce on the land such as mango garden coffee plantation or tea. It is common knowledge that other commercial crops such as tobacco, hemp, cotton and so on are grown on the land and though such crops have no food value nobody suggests that the purpose to which the land in which such crops are raised is not an agricultural purpose. If there is actual tilling of the soil either by a plough or spade and by expending human energy plantation is wised, there is no reason for not considering it as agriculture. The decision in Commissioner of Agricultural Income-tax v. Jagadish Chandra Deo : [1949]17ITR426(Cal) arose under the Bengal Agricultural Income-tax Act, 1944, which also contained a definition of 'agricultural income' which is similar in language to the definition in the Income-tax Act. The question was whether income derived from the sale of certain Sal trees was an agricultural income and derived from a land which was used for agricultural purposes. There were regular operations of forestry in the case and on an exhaustive review of the decision bearing on the point Mookerjee J. with whom Das J. agreed laid down the test at p. 440 as follows:

'It is, therefore, incontrovertible that income from a virgin forest or forest of spontaneous growth is not agricultural income. The view that tilling of the soil was the sine quo non for bringing within the term agriculture has also been exploded. If there is actual tilling of the soil for producing the production, it is the unquestionable result of agriculture pursuit.' The income derived from the sale of Sal tree was held to be agricultural income within the meaning of that Act.

6. The decision of Patanjali Sastri J. who delivered the judgment of the Bench in Sarojini Devi v. Srikrishna : AIR1944Mad401 in which the meaning of agricultural land within List II and List III in the Schedule VII, Government of India Act, 1935, was considered throws considerable light and also supports the view that unless there is something in the language of the enactment the word 'agriculture' must be interpreted in the general sense and not in a restricted and narrower sense. It is unnecessary again to subject the decision to a detailed examination which have been, if I may say so with respect, ably considered by the learned Judge and it will be sufficient to state the conclusion of the learned Judge which occurs at p. 68. He observed :

'We are of opinion that for the purposes of the relevant entries in Lists II and III of Schedule VII, the expresion 'agricultural land must be taken to include lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpose of husbandry. It follows that the mango grove in question is agricultural land in respect of which the Hindu Women's Rights to Property Act, 1937, does not operate to regulate succession.'

The trend of the decision of Varadachariar J. in Federal Court in Meghraj v. Allih Rakhia I.L.R. (1942) 23 Lah. 623: A. I. R. 1942 F. C. 27 also supports the view of Patanjali Sastri J. In Kajumal v. Saligram, 5 Lab. 50: A.I.R. 1924 P.C. 1 the Privy Council held that cultivation of tea is an agricultural purpose. The test laid down by Patanjali Sastri J. was applied by Byera J. in construing a provision of the District Municipalities Act in Pattamahadevi v. Municipal Council, Vizagapatam : (1945)2MLJ315 and my learned brother Viswanatha Sastri J. recently examined the question in Udipi Municipal Council v. Vasudevacharya : AIR1950Mad222 where also the question arose under the District Municipalities Act.

7. The learned counsel for the Income-tax Commissioner, Mr. Rama Rao Sahib, in a forceful argument referred to the decisions which have construed similar expression in the Transfer of Property Act and in the Estates Land Act. The decision in Venkayya v. Ramaswami, 32 Mad. 39: 8 M.L.J 278 does not help very much as all that was decided in that case was that when land was held by a ryot possessing permanent rights of occupancy in the land for raising paddy and raggi, if be raised or planted cocoanut trees on it, that would not constitute an act of waste and the raising of such crops would not be inconsistent with the purpose for which the land was let. In Murugesa Chetti v. Chinnathambi Goundar, 24 Mad. 421 Shephard and Bhashyam Aiyangar JJ., had to consider the question whether a lease for raising a betel garden was a lease for agricultural purpose within the meaning of Section 117, T. P. Act. Both the learned Judges held that it was an agricultural lease. Shephard J., referred to the colloquial meaning of the word 'agriculture' and also the general sense in which the word is used. 'In ordinary parlance,' says the learned Judge,

'a man who planted fruit trees or bushes in an enclosed space would be said to keep a garden. Neither he nor still less one who planted and maintained trees for firewood or other such purposes would be called an agriculturist. The term 'Agriculture' however is capable of being applied to tillage of the soil in the widest sense and alter considering the context in which the expression 'agricultural purpose' is used in the Transfer of Property Act, viz., in Sections 37, 106 and 108, I cannot say that it was intended to limit its denotation in any way. I think I was wrong in the opinion I expressed with regard to a coffee garden and that a lease of a betel garden is a lease for agricultural purposes within the meaning of the Act.'

The reference to the decision relating to coffee garden is to the decision in Kunhayen Haji v. Mayan, 17 Mad. 98 : 4 M. L. J. 21. In Panadai Pathan v. Ramaswami Chetti, 45 Mad. 710 : A. I. R. 1922 Mad. 351, Spencer and Ramesam JJ., decided that the lease of land for growing casuarina trees was a lease for agricultural purpose within the meaning of Section 117, T. P. Act. Both the learned Judges referred to the Dictionary meaning of the word. Spencer J., at page 713 stated his conclusion in these words: 'In my opinion agriculture connotes the raising of useful or valuable products which derive nutriment from the soil with the aid of human skill and labour; and thus it will include horticulture, arboriculture and sylviculture in all cases where the growth of trees is effected by the expenditure of human care and attention in such operations as those of ploughing, sowing, planting, manuring, watering, protecting etc.'

Ramesam J., at page 714 was against placing a narrower interpretation upon the word, for he says,

'To give a narrower interpretation to the term and to confine it to the raising of products used as food for man or beast will exclude all cultivation of fibrous plants such as cotton, jute and linen and all plants used for dyeing purposes, such as indigo, etc., and all timber trees and flowering plants. I do not think this is the intention of the Act. The rearing of casuarina plantation requires some preparation of the ground and subsequent care by watering the plants.'

This view however, was not accepted by Reilly and Ananthakrishna Ayyar JJ., in Chandrasekhara v. Doraiswami, 54 Mad. 900 : A. I. R. 1981 Mad. 659. Reilly J., referred to the earlier decisions and he rejected the narrower interpretation placed upon the word by Bhashyam Aiyangar J., in Murugesam Chetti v. Chinnathambi Goundar, 24 Mad. 421 and the opinion of Sadasiva Aiyar J., in Raja of Venkatagiri v. Ayyappareddi, 38 Mad 738 : A. I. R. 1915 Mad. 781, that agriculture is confined to the production of 'grain crops.' The learned Judge saw no reason to exclude the raising of cotton, jute and hemp etc., for agricultural purpose. He was of the opinion that agriculture should not be confined to the nature of the productions cultivated but should be defined by the circumstances in which cultivation is carried. He was however against including in the definition the planting of timber or firewood trees as they stand on the land for a considerable number of years and that the inclusion of such plantations in the term agriculture was opposed to the very idea itself. As the case, however, arose under the Estates Land Act, both the learned Judges gave as many as five reasons based on the provisions and the policy of the Act for holding that casuarina plantation was not agricultural purposes and that a person who holds the land for that purpose is not a ryot within the meaning of the Estates Land Act. The value of this decision therefore in interpreting the Income-tax Act where there is no contrary indication to cut down the general sense in which the word is used is very little.

8. Lastly, there is a group of cases which arise under the Estates Laud Act and where it was held that the holding of land for pasturage was not an agricultural purpose. Rajah of Venkatagiri v. Ayyappareddi, 88 Mad. 738 : A. I. R. 1915 Mad. 781, Maharaja of Venkatagiri v. Rami Reddi, (1917) 31 M. L. J. 211 : A. I. R. 1917 Mad. 106 and Seshayya Garu V. Rajah of Pithapur, (1917) 31 M. L. J. 214 : A. I. R. 1917 Mad. 649. The first of this group of cases stresses upon the meaning of the word 'cultivable' in the definition of 'ryoti land.' 'Ryoti land' is defined as cultivable land and if the land according to the decision was not permanently cultivable but was fit only for pasturage it was not ryoti land within the meaning of the Act. A person who holds a land for pasturage cannot be said to hold the land for agricultural purpose under the Estates Land Act. The Act itself contains clear indications to this effect. Firstly, the fee payable for pasturage is included in definition of 'rent' and is not treated otherwise as part of rent. In the second place, Section 6 (2) enacts that if land is held under a contract for pasturage of cattle the tenant so holding the land would not acquire permanent rights of occupancy in the land and by reason of such letting the land, it does not become ryoti land. 'Agriculture' is denned in the Act as including horticulture, which is an indication that the word is used in a 'narrower sense. It is for these reasons that those decisions held that the holding of a land for pasturage was not for agricultural purposes. These decisions, in my opinion, afford no assistance in deciding the question under the Income-tax Act.

9. It was held in In re, Moolji Sicka and Co., : [1939]7ITR493(Cal) that acts of pruning tendu shrub and separating the leaves constituted cultivation of the shrubs and the profits derived therefrom was agricultural income. The decision takes a very wide view of the meaning of the word 'agriculture.'

10. In my view, therefore, the answer to the question referred to us should be in the affirmative and in favour of the assessee. The assessees in these references are entitled to their costs which we fix at Rs. 1050 in all the references (i. e.) Rs. 150 for each assessee.

11. Viswanatha Sastri J.--The facts on which this reference is based are these: Casuarina trees do not grow spontaneously. Seedlings have first to be raised on beds prepared for the purpose and manured and watered. Seedlings are usually bought in large quantities by persons who raise casuarina plantations but sometimes they raise seedlings on their own land. The land on which a plantation is contemplated has to be levelled, and small pits for the reception of the seedlings have to be dug with sufficient interspaces. The seedlings are then transplanted, and the pits filled up. The young plants have to be watered by lifting water from ponds or wells lying in the vicinity or excavated on the land for the purpose. The plants require to be watered at intervals for the first 3 to 5 years the period varying with the nature of the soil and the local rainfall. Small earthern ridges are put up round each plant in group of plants so as to catch and retain rain water for the growing plants. The plants grow for a period ranging from 7 to 10 years, the period of growth varying with the nature of the soil, the demand for fuel and the pecuniary needs of the planters. The trees, when cut, are mostly used as fuel, though casuarina is also used for the erection of temporary structures. On these facts which are generally descriptive of casuarina cultivation in this presidency, can it be said that the income derived by the planter from the sale of casuarina trees is 'agricultural income' as defined in Section 2, Sub-section (1) (a) and (b) and-therefore exempt from income-tax under Section 4 (3) (viii), Income tax Act? It is common ground that the land on which the casuarina trees are grown is assessed to land revenue in what was once British India but now the Indian Republic. When exemption from income-tax is sought under Section 4 (3) (viii), Income-tax Act, for 'agricultural income', the primary condition must be satisfied that the land whose income is in question is used for agricultural purposes. The expression, 'such land' in Section 2 (1) (b) refers back to the land mentioned in Section 2 (1) (a) and must have the same quality, i.e. of being used for agriculture purposes.

12. I shall briefly advert to the genesis of the provision exempting agricultural income derived from lands assessed to land revenue, as I consider the subject-matter with which the Legislature was dealing, and the facts existing at the time with respect to which the legislation was made, are legitimate topic for consideration in ascertaining the object and scope of the exemption from income-tax conferred on agricultural income. This exemption, it would be noticed, has been a persistent feature of the income-tax legislation of this country, from 1867 onwards, and nothing like this is found in the English Income-tax Act. Even at a time when there was no provision like Section 100, Government of India Act, 1935, the Federal and Provincial Lists and there was no incompetency on the part of the Central Legislature to levy a tax on agricultural income, the Income-tax Acts passed from time to time by the Central Legislature including the existing, Act of 1922, exempted from income-tax the agricultural income of lands assessed to public revenue. This exemption was granted for no other reason than the justice and equity of exempting from further burden income which had already paid its toll to the State in the shape of land revenue either as a permanently fixed peishcush under Regn. No. XXV of 1802 or as an assessment periodically fixed under that ryotwari settlement. Under what may be called the common law of India, the State had the immemorial prerogative right to collect a share of the produce of the land from its owner, the latter having a full right to the enjoyment of the land and its produce, subject only to the aforesaid contribution to the State Land revenue is collected annually from the proprietor of the land and is presumably exigible from the income of the land. Cash payment in lieu of a share of the produce due to the State, was substituted long 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.

13. It is true that in tax cases the Court has not got to see what, in its judgment, the Legislature might reasonably do but what it has actually enacted by way of imposed burden or provided relief. The expression 'agriculture' has been frequently used in different enactments with different meanings furnished either by way of definition or illustration in the enactments, and cases decided under other enactments have been freely drawn upon by the learned counsel in the course of their arguments in this case. I do not know that judicial attempts to define the expression 'agriculture' or to draw the dividing line between what is and what is not ''agriculture' with reference to operations carried out on land have been very successful. But help in deciding the question before us may be obtained by examining the reported decisions as showing how in particular circumstances the dividing line has been drawn. There being no definition of 'agriculture' and 'agricultural purpose' in the Income tax Act, the words have to be construed and understood in their popular sense and according to their ordinary meaning.

14. The Queen v. Income-tax Commissioners, (1888) 22 Q. B. 296 : 58 L. J. Q. B. 196 affirmed on appeal in Commissioners of Special Purpose of Income-tax v. Pemsal, 1891 A. C. 531 : 61 L. J. Q. B. 265. Exemption from tax granted by a Statute should be given full scope and amplitude and should not be whittled down by importing limitations not inserted by the Legislature. Associated Newspapers Ltd. v. City of London Corporation, 1916 2 A. C. 429 : 85 L. J. K. B 1786; Sinclair v. Cadbury Bros, (1934) 18 T. C. 157 : 103 L. J. K. B. 29; Hughes v. Bank of New Zealand Ltd., 1938 A. C. 366 : (107 L. J. K. B. 306; In re North British and Mercantile Insurance Co., I. L. R. (1937) 2 Cal 540.

15. To some extent the connotation of the word 'agriculture' depends on the common notions of people in the particular country in which its interpretation is called for. Hearing of sheep, poultry, pigs, cows, bullocks, and horses, has been considered in England to be included in the term 'husbandry' which is given as a synonym for 'agriculture' in the Oxford dictionary. The same meaning has been attached to that expression in cases which arose under the English Income-tax Act. In India there has been divergence of opinion with regard to the interpretation of the word 'agriculture' used in local as well as general enactments. The Judicial Committee observed that no assistance was to be got from the meaning ascribed to the word 'agriculture' in other enactments in interpreting the word as used in the Income-tax Act. Mustafa Ali Khan v. Commissioner of Income-tax . I do not therefore propose to examine the many cases cited to us turning on the construction of the word ''agriculture' used in other enactments. In some cases the view has been expressed that 'agriculture' means the cultivation of a field the cultivation of an open space for raising annual or periodical crops or other produce of the land useful to man and animals. According to this view, the planting of timber or firewood trees which are to stand on the land for a considerable number of years is opposed to the idea of 'agriculture' which, in the light of its derivation, means the cultivation of a field or an open space. See Reiliy J. in Chandrasekhara v. Doraiswami, 54 Mad 900 : A.I.R. 1931 Mad. 659. It is true that the two latin words from a combination of which the word ''agriculture' has been derived mean 'field cultivation'; but I am not driven to the necessity of attributing to the Indian Legislature a precise adherence to the classical origins of an English word in common use throughout the world. In my opinion, the word ''agriculture' is used in Section 2, Income-tax Act in a wide sense so as to denote the raising of useful or valuable products which derive nutriment from the soil with the aid of human skill and labour. It would include horticulture, which involves intensive cultivation of land as garden in the production of fruits, flowers or vegetables. It would also include growing of trees or plants whose growth is effected by the expenditure of human efforts, skill and attention in such operations, as those of ploughing, sowing, planting, pruning, manuring, watering, protecting, etc., as held by Spencer J. in Panadai Pathan v. Ramaswami Cheti, 45 Mad. 710 : A. I. R. 1922 Mad 351. The word 'agricultural' applies to the cultivation of the soil for food products or any other useful or valuable growths of the field or garden and is wide enough to cover the rearing feeding and management of livestock, which live on the land and draw their sustenance from the soil.

16. In Mustafa Ali v. Commissioner of Income-tax the Judicial Committee approved of the decisions in, Yuvarajah of Pithapuram v. Commissioner of Income-tax, I. L. R. (1946) Mad. 743 ; A. I. R. 1947 Mad. 157 and Benoy Ratan Banerji v. Commissioner of Income-tax. : [1947]15ITR98(All) and held that income derived from the sale of trees described as 'forest trees growing' on land naturally' was not agricultural income and was therefore not exempt from tax. Lord Simonds in delivering the judgment of the Board observed:

'Though it must always be difficult to draw the line, yet unless there is some measure of cultivation of the land, some expenditure of skill and labour upon it, it cannot be said to be used for agricultural purposes within the meaning of the Income-tax Act.'

If the matter had stood there, the answer to the question referred to us would present no difficulty; but the learned Lord also added the following observation :

'The question seems not yet to have been decided whether land can be said to be used for agricultural purposes within the section, if it has been planted with trees and cultivated in the regular course of arboriculture and upon this question, their Lordships express no opinion.'

This last observation was perhaps made ex abundanti, cautela and does not imply that the Board treated arboriculture, horticulture and sylviculture as standing on a different footing from 'agriculture' for purposes of the Income-tax Act. Relying on this passage in the judgment of the Board, it is argued by Mr. Rama Rao Sahib that the expression 'agriculture' in Section 2 (1) (a), Income-tax Act must be given a restricted interpretation as denoting the operations of tilling, manuring, sowing planting, watering, tending and harvesting the crop or produce of the land at periodical intervals. He argues that the planting of trees which might stand on the land for a long period of time and might then be cut down for use as fuel or timber could not be said to be an 'agricultural purpose' within the meaning of Section 2 (1) (a), Income, tax Act.

17. It is a matter of ordinary experience, at least in this part of the country, that mango, cocoanut, palmyra, orange, jack, arecanut, tamarind and other trees are planted usually in an enclosed land, and that these trees do not yield any fruit or crop in the early years of their growth. They remain on the land for a long number of years yielding fruit only after their maturity. There is no reason why the planting, rearing, watering, fencing and protection of such trees and the gathering of their fruits during the annual seasons should not be held to be 'agriculture.' There is some kind of cultivation or prodding of the soil at the inception when the planting is done and subsequently also at intervals. In the case of coffee grown on hill-slopes, there is no ploughing or tillage as in the case of wet and dry fields; but it cannot be maintained that growing coffee is not an agricultural operation. Coffee and tea plants stand on the soil for many years, and their produce is gathered periodically. In the padugai lands or lands lying between the sandy bed and the flood bank of rivers, plantains are grown in many places in deltaic tracts. Young plants are often brought and planted in pits dug for the purpose in a row with sufficient interspaces. Trenches are dug by the side of a row of a plantain trees in order to catch and retain water. The plantain tree lasts for about two years, and from each tree offshoots spring up and grow in the place of the parent tree. There is thus a natural replenishment of the plantain garden. It cannot be said that the raising of plantains is not an agricultural purpose. Similarly in the case of sugarcane, the plants stand on the land for two years or a little more, and there are usually two cuttings Castor plants stand for some years on the soil and the seeds are periodically gathered in. Bamboo is often planted in enclosed lands by digging pits, filling them with sand and manure and then planting the young stalks in a bunch at suitable distances. Watering is done for the first, two or three years. Every year the land surrounding each bamboo cluster is dug with a spade and small earthern ridges are put up so as to catch and retain rain water. Bamboo plants attain maturity in about three or four years, and the thorny branches which grow on the main stem are then fit to be cut off and used for fencing purposes. The main stems stand on the laud for many years and are then out and used for scaffolding or as rafter for roofs and sheds and also for other purposes. I am unable to see why these operations are not agricultural operations. Pasture land used for the feeding and rearing of livestock is land used for agricultural purposes: King-Emperor v. Alexander Allan, 25 Mad. 627: 12 M. L. J. 393. Rearing of livestock such as cows, buffaloes, sheep and poultry is included in 'husbandry'. These animals are considered to be the products of the soil, just like crops, roots, flowers and trees, for they live on the land and derive their sustenance from the soil and its produce. Glanley v. Whightman, (1938) A. c. 618, Commissioner of Income-tax, Burma v. Kokinne Dairy & Co., (1938) 6 I. T. R. 502 : A. I. R. 1938 Rang. 260. It is not, therefore, legitimate, in my opinion, to confine the word 'agriculture' to the cultivation of an open field with annual or periodical crops like wheat, rice, ragi, cotton, tobacco, jute, etc. Casuarina is usually raised on dry lands of poor quality, and it is usual to find the same land used alternatively for the cultivation of ordinary cereal crops like groundnut, gingeley, cholam, kambu, etc., and for the raising of casuarina plantations. The land bears the dry assessment whatever be the nature of the Crop raised thereon.

18. In Murray's Oxford Dictionary 'agriculture' has been defined as the science or art of cultivating the soil, including the allied pursuits of gathering in the crops and rearing livestocks, tillage, husbandry, farming (in the widest sense). In Webster's Dictionary the expression is defined as the art or science of cultivating the ground, including the preparation of the soil, the planting of seeds, raising and harvesting of crops and the rearing, feeding-and management of livestock and as including in its broad sense, farming horticulture, etc. It has now been held by the Judicial Committee that the word 'agriculture' involves some measure of cultivation of the laud or some expenditure of skill and labour upon it. The extent and intensity of the cultivation and the quantum of the effort and labour spent vary with varying soils and the plants or crops raised thereon, and no particular or fixed standard can be prescribed as applicable to all cases.

19. As pointed out by Varadachariar J. in Meghraj v. Alla Rakhia, I. L. R. (1942) Lah. 623 : A. I. R. 1942 P. C. 27 where all the relevant earlier cases are reviewed, decisions turning on the interpretation of local Tenancy Acts are not of relevance in this connexion. Both in Meghraj v. Alla Rakhia, I. L. R. (1942) Lah. 623 : A. I. R. 1942 F. C. 27 and in Sarojini Devi v. Krishna Anjaneya : AIR1944Mad401 it was pointed out that the expression 'agricultural land' in Lists 2 and 3 of Schedule VII, Constitution Act, 1985, should receive a wide interpretation and that Parliament could not have intended that the particular circumstances under which, cultivation was carried on or the nature of the produce raised on the land should determine the law which governed the devolution of the land. In the latter of the two cases above cited, a mango grove was held to be agricultural land. It is equally unlikely that when the Legislature enacted the Income-tax Act it intended that the income from assessed land should be exempt from income-tax if one kind of crop was grown thereon but should be subjected to tax if another variety was raised. Cultivation of cocoanut trees which stand on the land for decades and yield cocoanuts periodically has been held to be an agricultural purpose in Venkayya v. Ramaswami, 22 Mad. 89 : 8 M. L. J. 278 which was approved in Murugesa Chetti v. Chinnathambi Goundan, 24 Mad 421. In Narayana v. Subramaniam, I.L.R. (1987) Mad. 364: A.I.R. 1937 Mad. 254 it was held that a cocoanut garden was a fruit garden. 'Agriculture' has been held to include the raising of a casuarina tope or plantation, and a lease of land for such a purpose has been held to be a lease for an ''agricultural purpose' within the meaning of Section 117, T. P. Act, and, therefore, exempt from registration: Panadai Pathan v. Ramaswami Chetti, 45 Mad. 710 : A. I. R. 1922 Mad. 351. The earlier decision to the contrary in Devaraja Naicker v. Ammaniammal, 3 M.L.W. 319: A.I.R. 1917 Mad. 787 to some extent, but not wholly, proceeds on the admission of counsel and cannot be considered to be a binding authority in view of the later decision above cited. The decision of Reilly and Ananthakrishna Aiyar JJ. in Chandrasekhara v. Duraisami, 54 Mad. 900: A.I.R. 1981 Mad. 659 holding that a tenant of land who took a lease for the purpose of planting casuarina trees thereon was not a 'ryot' most be confined to cases arising under the Madras Estates Land Act. The incidental observations of Keilly J. in that case as to the meaning of the expression 'agriculture' cannot govern the interpretation of that term in other enactments. Land covered by a casuarina plantation has been held to be agricultural land for purposes of assessment to property tax under Section 81, Sub-section (3) and (4), Madras District Municipalities Act, in Pattamahadevi v. Municipal Council, Vizagapatam, (1946) 2 M.L.J. 815 : A. I. R. 1946 Mad. 143. There is a passing observation in the case reported in Khantamoyee Devya, v. Rukmini Devy, 48 C.W.N. 759 that land used for planting trees for fuel might possibly be considered. to be non-agricultural land, This observation is purely obiter and not a considered decision on the point, and even otherwise, I am unable to agree with it.

19. I would hold that irrespective of the nature of the produce or product of the land, whatever is grown on land aided by human labour and effort, whatever does not grow wild or spontaneously on the soil without human labour or effort, would be an agricultural product, and the process of producing it would be 'agriculture' within the meaning of that expression in Section 2, Income-tax Act. In short, the word is used to denote the raising of valuable or useful products deriving nutriment or sustenance from the soil with the aid of human labour, or skill. Having regard to (1) the history of the relevant provision and the reason for the exemption of agricultural income from income-tax, (2) the more extended signification acquired by the word 'agriculture' in modern usage and the wider ambit of interpretation allowed by our taxing statutes. English and Indian, than the mere tilling or cultivation of an open field and (3) the unlikelihood of the Legislature differentiating arbitrarily between different kinds of plants or crops grown on the same land for the purpose of exemption from income-tax, I would answer the question referred to us in the affirmative. In Commissioner of Agriculture, Income-tax v. Jagadesh Chandradeo : [1949]17ITR426(Cal) it was held by a Division Bench of the Calcutta High Court that income derived from the sale of Sal trees growing spontaneously in forests and not planted by man was 'agricultural income' within the meaning of Section 2 (1), Bengal Agricultural Income-tax Act. There was no digging or ploughing of the land nor planting of trees but there were 'operations in forestry' such as guarding the forest trees to keep away cattle and allowing leaves and undergrowth to be removed by people of the locality. There was no breaking up of the soil, no sowing or planting or watering or fencing. Whether the decision is correct or not can only be authoritatively declared by the Supreme Court of India. It seems to rest on an undue extension of the principle laid down by the Judicial Committee in Mustafa Ali Khan's case and goes much further than our decision in the present case. I agree in the direction as to costs made by my learned brother.


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