Law:

Section:

Section 2(14) of the Income-tax Act, 1961 - Capital gains - Capital assets - Assessment year 1991-92 - Where income from sale of shade trees on coffee estate was taken as capital gains in previous assessment year as declared by assessee, assessee could not take a contrary stand for subsequent assessment year [In favour of revenue] The assessee was an individual and owner of a coffee estate and filed his return of income for the assessment year 1991-92 declaring loss. The said return of income had been processed under section 143(1)(a) accepting the loss returned. Subsequently, the case of the assessee was taken up for scrutiny and notice under section 143(2) had been issued. After rejecting the stand of the assessee that the sale proceeds of the silver oak trees (shade trees) standing in the coffee estate would not attract the capital gains, the Assessing Officer concluded that the sale of shade trees would attract capital gains and, accordingly, computed the capital gains. The Tribunal upheld that order. On appeal, the assessee took the stand that the income derived from the sale of shade trees was agricultural income and outside the purview of the Act. Held that in the assessee's own case in respect of the assessment year 1990-91 the assessee himself offered a sum of Rs. 56,000 as income arising out of the sale of shade trees in his coffee estate for capital gains, but later, filed a revised return seeking exclusion of the said sum on the premise that the trees which were cut and sold by the assessee had been planted by the previous owner of the estate and removal of the said old trees was sought for better yield from the coffee plants and, therefore, the income derived from the sale of such trees in the coffee estate was agricultural in nature and, consequently, the same fell outside the purview of the Act. The matter was taken by the assessee to the High Court in writ appeal which held that there was no controversy about the fact that the shade trees were planted by the previous owner and they had become old and useless due to efflux of time and, therefore, they were cut and sold for planting shade trees newly for better yield from the coffee plants and as…

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