Raja Benoy Kumar Sahas Roy V/S C.I.T
- Whether the income arrived comes under the definition of "Agricultural
Income" or not?
The Commissioner Of Income-Tax, West Bengal, Calcutta
Raja Benoy Kumar Sahas Roy
Bench: Bhagwati, Natwarlal H.Aiyyar, T.L. Venkatarama, Kapur, J.L.
Citation: 1957 AIR 768 1958 SCR 101
Respondent said that he had hired staff for the precise operations like:
- Respondent Raja Binoy Kumar Sahas Roy owned 6000 Acres of forest.
- Forest including "Sal and Piyasal" trees.
- Forest was grown naturally.
- Raja Binoy Roy sold the trees and earned Income
- The forest was in the spontaneous growth of 150 yrs.
- As per the Respondent the income arrived from the cutting of those
forest falls under Section 10(1) of Revenue Enhancement which is exempted
from the tax.
- The Income Taxation Officer rejected Respondent's plea for exemption and
imposed tax on its income too.
- As the Respondent wasn't satisfied therewith the decision then He went
to Appellate Assistant Commissioner and Appellate Tribunal.
- Appellate Assistant Commissioner and Appellate Tribunal both got agreed
with the Income Taxation Officer's decision.
- Then the case went after Hon'ble Calcutta's judicature.
Respondent is saying that he had performed Agricultural Operation on the land
- Cutting of channels to assist the flow of rain water.
- Protecting the trees against pests and other destructive elements
- Sowing of seeds after digging of the soil in denuded areas.
Decision of Tribunal:
- Primary Operation
- Subsequent Operation
Tribunal found that employment of human labour skill mentioned in (a) to (f) was
necessary for the upkeep of the forest and clause (g) was performed on small
fraction of area where the original growth is completely denuded.
Appellate Tribunal opined that income was generated from spontaneous land which
is jungle and isn't consider under section 2(1) of the act.
Decision of High Court of Calcutta:
High Court mentioned the land which has spontaneous growth does not comes under
the definition of Agricultural Land.
According to Income Tax Act,1961 A Section 2(1A) Agricultural Income is defined
- Rent or Revenue
- Agricultural situated in India
- Agricultural Purpose
- Income must be directly related to the land.
The court stated that income to be called agricultural income some basic
operations must be conducted. Human skill and labour should be implied thereto
part, not for any basic care like weeding or preservation of trees.
High Court said that for any cultural activity it is important that there should
be basic operations like tilling of the land, sowing of the seeds, planting etc
is necessary to establish an activity as an agricultural operation and mere
subsequent activity like weeding, felling, cutting and guarding cannot be
constituted as agricultural income.
High Court mentioned that the forests are 150 yrs. old so it is not possible
that Respondent planted those trees.
High Court upheld the decision of the Appellate Assistant Commissioner and
Decision of the Hon'ble Supreme Court:
- Supreme Court stated that Agriculture means when both primary and
subsequent operations should be performed on the land
- Supreme Courted further stated that only subsequent operations are performed on
the land which isn't enough to think about it as Agricultural Income as Primary
Operations are missing.
- Supreme Court agreed with the decision of the Appellate Assistant Commissioner,
Appellate Tribunal and Hon'ble High Court.
- Supreme Court after applying the cost dismissed the Appeal and the decision gone
in the favour of CIT.