1. The question that arises in this case is whether the sale proceeds of certain trees cut and sold from the petitioner's rubber plantation could be assessed under the Travancore Cochin Agrl. I.T, Act, 1950. For the assessment year 1964-65, the petitioner had cut and sold albezzia and malavembu trees of the value of Rs. 19,725, This was included in the assessable income of the petitioner as determined under the said Act.
2. The petitioner questioned the said inclusion by filing an appeal, originally before the Asst. Commr. of Agrl. I.T., and later before the Agricultural Income-tax Appellate Tribunal, Madras. Before the Tribunal the petitioner's case was that the above trees, which had been cut and sold,were planted solely for the purpose of affording protection to the rubber plants and that, therefore, the sale proceeds of those trees cut and sold during the assessment year could not be treated as revenue receipt and brought to tax under the provisions of the said Act. Before the Tribunal, the decision of the Supreme Court in State of Kerala v. Karimtharuvi Tea Estate Ltd. : 60ITR275(SC) was relied on by the petitioner in support of his claim that the sale proceeds of the trees cut and sold during the assessment year could not be brought to tax. The Tribunal, however, distinguished the said decision and held that the principle of the decision would not apply to the facts of the case, as the albezzia and malavembu trees cut and sold during the assessment year had been specifically planted in the margins and vacant places of the plantation with a view to derive income by cutting and selling them for the production of catamarans. According to the Tribunal, the object of planting the said trees was to derive income from them, and they had not been specifically and solely planted for the purpose of giving- protection to the rubber plants, as was the position in the case before the Supreme Court and as such the income by way of sale of those trees could be treated as revenue receipt and brought to tax under the said Act. As a reference has been sought for by the petitioner against the decision of the Tribunal, the matter has come before us.
3. Before us learned counsel for the petitioner relies on a judgment of a Bench of this court (to which one of us was a party), wherein the sale value of the albezzia trees cut and sold from the petitioner's plantation for the previous assessment year 1963-1964 was held not to be a revenue receipt. Nellayappan Sastha & Bros. v. Commr. of Agrl. LT. : 86ITR151(Mad) was a decision rendered in respect of the petitioner's own case for the previous assessment year. It is said that, in view of the said decision, the decision of the Tribunal, which is the subject-matter of the present tax reference, should be set aside.
4. We are not, however, inclined to agree with this submission of learned counsel. In the decision referred to by learned counsel, the Tribunal had specifically found that the albezzia trees cut and sold during the previous assessment year had been grown for the specific purpose of protecting the rubber plants in the assessee's plantation. In view of that specific finding .that the sole object of planting the albezzia trees was only to protect the rubber plants, it was held in that case, following the decision of the Supreme Court in State of Kerala v. Karimtharuvi Tea Estate Ltd. : 60ITR275(SC) , that the sale proceeds of those trees would not come under the definition of agricultural income. But, when the Tribunal considered the assessee's case for the subsequent assessment year 1964-19657 fresh materials had been placed before it to indicate that the albezzia and mala-vembu trees had been specifically planted in the margins and vacant places in the plantation for the purpose of utilising them in the production of catamarans and the assessee was thus deriving an income therefrom. The Tribunal has specifically found that rubber plants do not require shade, that the trees in question have not been planted to give shade to the rubber plants, and that the object with which the trees had been planted was not solely to protect the rubber plants, but to derive income from those trees by selling them for the production of catamarans. The above findings have not been challenged before us. The planting of the trees in the margins and vacant places in the plantation becomes agricultural operation and the income derived from such activity or operation would attract tax under the Act. We, therefore, accept the view taken by the Tribunal in this case, even though in respect of the earlier assessment year the petitioner had succeeded before this court in Nellayappan Sastha & Bros. v. Commr. of Agrl. I.T. : 86ITR151(Mad) with regard to the sale proceeds of trees cut and sold from the plantation. The reference is accordingly answered against the assessee and in favour of the revenue, with costs. Advocate's fee Rs. 250.