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P. Chellaiah Pillai Vs. the Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai
Decided On
Reported in(1948)2MLJ418
AppellantP. Chellaiah Pillai
RespondentThe Commissioner of Income-tax
Cases ReferredBrojobasi v. Ramsankar
Excerpt:
- - the tribunal was of the view that the assessee had failed to establish that the income in question came within the exception of section 4(3)(viii) which exempts agricultural income altogether from assessment. the pasturing of cattle is so closely allied to agriculture that it has become (sic) to be considered part and parcel of it and the meaning of the term is now so well established that there is no longer room for doubt......was taken on lease by a grazier and the assessee was a landlord and the lease was specifically for grazing purposes, it cannot be disputed that the purpose of the lease was agricultural.2. there was considerable discussion at the bar with regard to the precise con notation of the terms 'agriculture' and 'agricultural purpose.' but for the purposes of this case and in the view we have taken of the correct finding as appears from the statement of the case, it seems scarcely necessary to embark upon a lengthy discussion of the question raised as to whether the use of land for purposes of pasture amounts to a use for agricultural purposes and whether the income derived from that source is agricultural income for the purposes of the act. a brief reference to a few of the cases cited will be.....
Judgment:

Yahya Ali, J.

1. The question referred by the Income-tax Tribunal to this-Court for decision under Section 66 (1) of the Income-tax Act is:

Whether in the absence of any evidence to show that the land was used for agricultural purpose the grazing fee of Rs. 2,873-8-0 realised from the letting out of the lands would constitute agricultural income.

The reference was made at the instance of the assessee and counsel for the applicant at the outset pointed out that in the way in which the question has been formulated by the Bench, he has been virtually stated out of the case. The frame of the question is such that the only possible answer that can be given in its present form would' be against him. Having regard to the facts of the case and the various contentions that have been placed before us, we consider it necessary to re-formulate the question in order to furnish the correct answer to the real question that arises from the order of the Tribunal. The counsel for the department has no objection. The question will therefore be re-framed as follows:

Whether in the circumstances of the case, the grazing fee of Rs. 2,873-8-0 realised from the letting out of the lands would constitute agricultural income within the meaning of Section 2(1)(a) of the Act.

The assessee according to the facts set out in the statement of the case is a landlord and had realised the income under assessment from graziers. The land was let out for grazing and we are informed by learned Counsel for the assessee that the land is situate in a village at a distance of six miles from Tuticorin. The Tribunal was of the view that the assessee had failed to establish that the income in question came within the exception of Section 4(3)(viii) which exempts agricultural income altogether from assessment. The reason for that conclusion was that the assessee did not adduce any evidence before the Bench to show that the land that was let out for grazing was used for agricultural purposes. In the circumstances mentioned above, there seems to be no room for doubt that the grazing of the land was by cattle used for agricultural purposes. Having regard to the fact that it was a village and the land was taken on lease by a grazier and the assessee was a landlord and the lease was specifically for grazing purposes, it cannot be disputed that the purpose of the lease was agricultural.

2. There was considerable discussion at the Bar with regard to the precise con notation of the terms 'agriculture' and 'agricultural purpose.' But for the purposes of this case and in the view we have taken of the correct finding as appears from the statement of the case, it seems scarcely necessary to embark upon a lengthy discussion of the question raised as to whether the use of land for purposes of pasture amounts to a use for agricultural purposes and whether the income derived from that source is agricultural income for the purposes of the Act. A brief reference to a few of the cases cited will be sufficient. In Emperor v. Probatchandra Barua I.L.R. (1924)Cal. 504 the question arose with regard to the income from pasturage-whether the income derived from permanently settled estates from that source was liable to income-tax. It was conceded by the department that the income from pasturage was derived from land which was used for agricultural purposes and that the assessee was entitled to exemption under Section 4(3)(viii) of the Act. The learned Judges, Rankin and Page, JJ., observed:

In the circumstances that such income is derived from fees realised from graziers who graze their cattle in the forest areas and waste lands there is nothing to render inapplicable the definition of ' agricultural income' contained in Clause (a).

This case was sought to be distinguished on the ground that there was no discussion with reference to the question and that the matter proceeded upon a concession. In King-Emperor v. Alexander Allan (1901) 12 M.L.J. 393 : I.L.R. 25 Mad. 627 the lands were used as pasture lands for cattle and the question was whether that would be deemed to be used solely for agricultural purposes within the meaning of Section 63(3) of the Madras District Municipalities Act. It was held that in such circumstances the land used as pasture land for cattle should be deemed to be land used for agricultural purposes. In that case it was pointed out that the word ' agriculture ' is not to be restricted to tillage or cultivation and that all land used for pasture for cattle must be held to be land used solely for agricultural purposes. 'Agricultural lands' include lands set apart as 'pasture grounds only ' and also lands used for ' rearing livestock.' It was pointed out by the learned Judges that if it could be shown that the waste lands were in reality pasture grounds or lands used for rearing livestock, they would have held that they were lands used solely for agricultural purposes. The Calcutta High Court in a later case took the same view with regard to pasture land. In Surendra Kumar v. Chandrataranath : AIR1931Cal135 the question was whether the lease, inter alia, of certain areas for grazing cattle on the banks of a tank was a lease for agricultural purposes for the purposes of the Bengal Tenancy Act. In that case it was not specifically mentioned in the lease that the cattle were for purposes of cultivation. Graham, J., said:

It appears to be settled that, where land has been let out for the purpose of grazing cattle on it, the lessee may be a raiyat provided the grazing is ancillary to cultivation

* * * *But as was pointed out in the case just referred to above, it is necessary to bear in mind that the term ' agriculture ' is of wider import than the term ' cultivation'. The mere fact that cultivation is not expressly referred to does not therefore conclude the matter. Speaking for myself I should have thought that when a lease speaks of the objects in view as 'stacking grass for cattle' and 'grazing cattle ' it ought fairly to be deemed to be a lease for agricultural purposes, though no doubt it is conceivable that cattle may be kept for purposes having nothing to do with agriculture.

In the present case we may point out that it is not the case of the department that the cattle which grazed the land were used for any other purpose than agriculture. We may conclude this line of cases by referring to a recent decision of the Nagpur High Court in Beohar Raghubir Singh v. Commissioner of Income-tax, U.P., C.P. and Berar I.L.R. (1947) Nag. 425. This was a case which arose under the Income-tax Act and the question was, among others, whether pasturing of cattle is an agricultural process. Referring to a decision in Emperor v. Probatchandra Barua I.L.R. (1924) Cal. 504. Bose and Hemeon, JJ., said:

the pasturing of cattle is so closely allied to agriculture that it has become (sic) to be considered part and parcel of it and the meaning of the term is now so well established that there is no longer room for doubt.

With that observation with respect we are in entire agreement.

3. Mr. Rama Rao Sahib referred to some decisions which appear to, us to be distinguishable on the facts. The case of Yuvarajah of Pittapuram v. Commissioner of Income-tax, Madras (1946) I.T.R. 92 was not a case in which any question of pasture land was involved. It related to the income derived from forests of spontaneous growth, by the sale of wood, bark, leaves, other usufruct of trees, minor forest produce, etc. Next reference was made to two cases Maharajah Sir Pateshwari Prasad Singh v. Commissioner of Income-tax, U.P. and C.P. (1947) I.T.R. 181 and Raja Durga Narain Singh v. Commissioner of Income-tax (1947) I.T.R. 235. Both the cases are concerned with the nature of the income which arises from the sale of grass. A vital point of distinction, to our minds, exists between mere sale of grass and lease of land for purpose of pasture for cattle used solely for agricultural purposes. Lastly reference may be made to Brojobasi v. Ramsankar (1915) 23 Cal. L.J. 638. To a considerable extent we get from that case a lead as to the proper distinction that has to be drawn in such cases. The head note itself says:

A land may be used for the grazing of cattle required for agricultural pursuits, or it may be used for the grazing of cattle required for avocations totally unconnected with agriculture. In the former contingency, but not in the latter, the holding is used for an agricultural purpose and a right of occupancy may be acquired therein.

We concur with that distinction and the view that in a case where land is leased for grazing of cattle required for agricultural pursuits, it must be deemed to be used for an agricultural purpose.

4. We therefore answer the question that we have framed in the affirmative and hold that the grazing fee of Rs. 2,873-8-0 being agricultural income should be excluded from the assessment under Section 4(3)(viii) of the Act. The applicant will get his costs, Rs. 250 from the respondent.


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