Law:

Section:

Section 2(1A) of the Income-tax Act, 1961 (Corresponding to section 2(1) of the Indian Income-tax Act, 1922) - Agricultural income - Assessment year 1944-45 - Assessee derived income from sale of sal trees grown in his sal forests - There was no tilling of soil, no sowing of seeds or grafts and there was no watering done - Plot in which sal trees grew was kept free from leaves and undergrowths to prevent damage to new shoots - No operations were done on land except that it was kept free from objectionable undergrowth - There was no breaking up of soil by tilling or digging - There was no planting of seeds or saplings - Whether mere performance of subsequent operations on products of land, where such products were not raised on land by performance of basic operations, would not be enough to characterise them as agricultural operations - Held, yes - Whether, therefore, income from sale of sal trees in forests of assessee was not agricultural income within meaning of section 2(1) of 1922 Act - Held, yes FACTS The assessee had income from sale of sal trees grown in his sal forests. There was no tilling of the soil, no sowing of the seeds or grafts and there was no watering done. During the rainy season new shoots came out from stumps of old trees cut. Forest officers and guards were maintained to prevent new shoots from being damaged by men and cattle. Plot in which sal trees grew was kept free from leaves and undergrowths to prevent damage to new shoots. No operations were done on land except that it was kept free from objectionable undergrowth. There was no breaking up of soil by tilling or digging. There was no planting of seeds or saplings. There was no weeding in the ordinary cultivator's sense because the removal of the undergrowth was not, done by the assessee or at his expense but the villagers were allowed to clear and take away the undergrowth free of cost. The assessee's claim that the income from sale of said sal trees was agricultural income was disallowed by the department. On appeal, the Tribunal held that the income from the sale of sal trees was not agricultural income within the meaning of section 2(1) of 1922 Act. On reference : HELD The income,…

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