Law:

Section:

Section 2(1) , read with section 10(1) of the Income-tax Act, 1961 [Corresponding to section 2(1)(b)(iii), read with section 4(3)(viii), of the Indian Income-tax Act, 1922] - Agricultural income - Assessment years 1952-53 to 1954-55 - Assessee cultivated sugarcane on his land and converted it into jaggery for sale in market - Assessee claimed exemption of income received from sale of jaggery as agricultural income - Tribunal found that quality of sugarcane cultivated was such that it could not be used for chewing, and that existence of single mill would not constitute a market for assessee's sugar cane in its natural condition - Tribunal also indicated that said single purchaser had crushed such quantities of sugarcane in assessment years in question as it desired and that it had not been proved that larger and better quantities were desired to be purchased by it but had not been sold by outsiders like assessee - Tribunal also pointed out that sugarcane produced could not be stored for long time and in absence of purchasers cultivators had to convert it into jaggery by employing ordinary process - Tribunal had indicated several facts relating to single available purchaser which induced Tribunal to hold as a matter of fact that on evidence on record a finding could not be made in favour of revenue that sugarcane produce of assessee was saleable to its purchaser - Whether, on facts, Tribunal had sufficient evidence to justify its finding that there was no market for sugarcane produced by assessee in its natural conditon, and, hence, income received by assessee from sale of jaggery was exempt from tax as agricultural income - Held, yes FACTS For a number of years prior to the assessment year 1952-53, the assessee cultivated sugarcane on his lands and with the aid of three heavy horse power engines crushed and converted sugarcane into jaggery for sale in the market. He was assessed to income-tax in respect of the income from the sales of jaggery and had not claimed exemption in respect thereof. For the assessment years 1952-53 and 1954-55, the assessee claimed exemption in respect of income from jaggery having regard to the provisions in section 2(1)(b)( iii) read…

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