STATE OF TAMIL NADU Vs. KANTHIMATHY PLANTATIONS LIMITED

JUDGEMENT

(1.) THE Revenue is in revision against the order of the Tamil Nadu Agricultural Income-tax Appellate Tribunal, dated May 7, 1981. THE controversy in the revision is limited to the proceeds amounting to Rs. 4,46,795. According to the assessee-respondents, the sale proceeds are in the nature of capital receipts derived from the sale of old and uneconomic trees. On behalf of the Revenue what was contended before the authorities below, including the Tribunal, was that latex was capable of being extracted and the proceeds included the cost of extracted latex also. THE Tribunal, considering the agreement between the assessee-company and M/s. Union Traders, came to the conclusion that the agreement which had been entered into as early as in 1975, went on to show that the plantations which were sold after cutting were "almost dry and no latex again was available". THE Tribunal noticed that the plantations were made in 1943-44 and for the assessment year in question, the trees had been "completely removed and cleared for replanting purposes." On the basis of these materials, the Tribunal rightly found that the receipts of Rs. 4,46,795 were of a capital nature and as such not exigible to tax. We do not find any error in the order of the Tribunal.

(2.) LEARNED counsel appearing for the Revenue has drawn our attention to the judgment of a Division Bench in Kanthimathi Plantation Ltd. v. State of Tamil Nadu by the Agricultural Income-tax Officer (T.C. Nos. 392 and 393 of 1982 and 1692 of 1981, decided on January 4, 1984), where the same agreement was involved between the assessee and Union Traders and this court upheld the order of the Commissioner remitting the matter to the assessing authority for the purpose of determining the value of the latex and scrap and for assessing such value as agricultural income. That judgment is totally distinguishable as, in the instant case, the final fact-finding authority has, on the basis of the material on record, rendered the finding that no latex was available for extraction at the relevant time. It is, therefore, not necessary to remand the case to the assessing authority.