COMMISSIONER OF AGRICULTURAL INCOME TAX Vs. SOUNDARA RAJA

JUDGEMENT

(1.) STATE has come up in revision against the decision of the Tamil Nadu Agrl. IT Tribunal, Chennai -104, by which the Tribunal held that the amount realised by the assessee from the sale of silver oak tree, silver oak dried, Thandi green, Thandi bore and Albizzia green trees did not constitute agricultural income but were capital receipts as these trees were shade trees on a coffee estate and constituted capital assets

(2.) THE fact that the assessee owns a coffee estate and that these threes grown on the coffee estate were in fact shade trees, is not in dispute. It was not the case of the authorities at any time that these trees were used solely for the purpose of gaining revenue by way of sale of trees and that they are not necessary for the cultivation of coffee

(3.) GOVERNMENT Advocate, however, contended that any amount realised from the sale of any produce grown on the land would constitute agricultural income and is, therefore, liable to tax. Reliance was placed on the decision of the Supreme Court in the case of CIT vs. Raja Benoy Kumar Sahas Roy 1957 (32) ITR 466, 1957 AIR(SC) 768, 1957 SCJ 740, 1958 (1) SCR 101 (SC) : TC 31R.304 wherein the Court after exhaustive survey of earlier decisions of the Courts held as under: