# THE COMMISSIONER WEST BENGAL v. OF INCOME-TAX, CALCUTTA RAJA BENOY KUMAR SARAS ROY

- **Citation:** [1958] 1 S.C.R. 101
- **Court:** Supreme Court of India
- **Decided:** 1958
- **Case number:** Civil Appeal No. 165of1954
- **Bench:** Bhagwati, Venkatarama Ayyar, J.L. Kapur
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-commissioner-west-bengal-v-of-income-tax-calcutta-raja-benoy-kumar-saras-roy-1390
- **Pages:** 60

## Headnote

Income-tax-Exemption-Income from sale of forest trees, if
.and when agricultural income-"Agriculture", Meaning of-Indian
Income-tax Act (XI of 1922), ss. 2(1), 4(3) (viii).
The question for decision in this appeal by the Commissioner
·of Income-tax was whether a sum of Rs. 51,978 shown by the
assessee in his return as income from his forest land was agricultural income within the meaning of s. 2(1) of the Indian Incometax Act and was as such exempt from taxation under s. 4(3)(viii)
of the Act. The forest was of spontaneous growth, 150 years old,
and consisted of sal and piyasal trees. It was in parts denuded of
trees from time to time by destructive elements and the . assessee
had to plant fresh trees in those parts. Considerable amount of
human labour and skill lmd to be applied year after
year for .
maintaining the forest, protecting the offshoots from the stumps
of the trees that had been cut and sold and in reviving its denuded
parts by fresh plantation. The staff employed by the assessee
performed such operations as· pruning, weeding, felling, clearing,
cutting of channels, guarding the trees and sowing seeds by digging the soil in the denuded areas. The Income-tax Officer rejected
the assessee's claim of exemption an added a sum of Rs. 34,430
to the assessable income, allowing a sum of Rs. 17,548 as expenditure. The Assistant Commissioner of Income-tax confirmed the
assessment. The Appellate Tribunal held that the sowing of seeds
were few and far between and the income, derived as it was from
jungle products, was not agricultural income within the meaning
of the Act. The High Court took a contrary view, held that
tillage of the soil was not essential, and the income was agricultural income as human labour and skill had been expended on the
land itself and answered the question in favour of the assessee.
No attempt was, however, made by the Income-tax Authorities
to ascertain the income actually derived from the trees planted by
the assessee, nor were any materials placed on the record from
which its exact amount could be ascertained, but having regard
to the magnitude of the expenditure shown by the assessee as
against the total income this Court held that a substantial portion
of it must have been derived from the trees planted by the
assessee.
Held, that the income actually derived from the trees planted
by the assessee was agricultural income within the meaning of
s. 2(1) of the Indian Income-tax Act and no attempt having been
1957
May, 23
102
SUPREME COURT REPORTS
[1958J
19S1
made to ascertain its exact amount and a fresh enquiry being
The Commissioner u!'de~irable after such a long lapse of time, the appeal must be
of Income-tax,
d1sm1ssed.
Wc!rc!::fal
The term 'agriculture' in s. 2(l)(b)(i) of the Indian Income-tax
•·
Act connotes the entire and integrated activity of an agriculturist
Raja Benoy Kumar performed on the land in order to raise its produce and consists of
Sahas Roy
such basic and essential operations, requiring human skill and
labour on the land itself, as the tilling of the soil, sowing of the
seeds, planting and similar operations on the land and such other
subsequent operations, performed after the produce sprouts from
the land, as weeding, digging of the soil around the growth,
removal of undesirable under-growths, tending, pruning, cutting,
harvesting and marketing. But these subsequent operations, if
unconnected with the basic operations, cannot by themselves
constitute agriculture. It is only when the land is subjected to
such integrated activity, that it can be said to be used for
'agricultural purpose' and its income called agricultural income
within the meaning of the Act. .
Case-law discussed.
Whatever is produced by such agriculture must be an agricultural product and the ambit of the term 'agriculture' cannot be
confined merely to the production of grain and food for men and
cattle but must extend to all products of the land that have some
utility either for consumption or trade and comme

## Text

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.,
S.C.R. SUPREME
COURT
REPORTS
101
THE COMMISSIONER
WEST BENGAL,
v.
OF INCOME-TAX,
CALCUTTA
RAJA BENOY KUMAR SARAS ROY
(BHAGWATI, VENKATARAMA AYYAR and
J.L.
KAPUR JJ.)
Income-tax-Exemption-Income from sale of forest trees, if
.and when agricultural income-"Agriculture", Meaning of-Indian
Income-tax Act (XI of 1922), ss. 2(1), 4(3) (viii).
The question for decision in this appeal by the Commissioner
·of Income-tax was whether a sum of Rs. 51,978 shown by the
assessee in his return as income from his forest land was agricultural income within the meaning of s. 2(1) of the Indian Incometax Act and was as such exempt from taxation under s. 4(3)(viii)
of the Act. The forest was of spontaneous growth, 150 years old,
and consisted of sal and piyasal trees. It was in parts denuded of
trees from time to time by destructive elements and the . assessee
had to plant fresh trees in those parts. Considerable amount of
human labour and skill lmd to be applied year after
year for .
maintaining the forest, protecting the offshoots from the stumps
of the trees that had been cut and sold and in reviving its denuded
parts by fresh plantation. The staff employed by the assessee
performed such operations as· pruning, weeding, felling, clearing,
cutting of channels, guarding the trees and sowing seeds by digging the soil in the denuded areas. The Income-tax Officer rejected
the assessee's claim of exemption an added a sum of Rs. 34,430
to the assessable income, allowing a sum of Rs. 17,548 as expenditure. The Assistant Commissioner of Income-tax confirmed the
assessment. The Appellate Tribunal held that the sowing of seeds
were few and far between and the income, derived as it was from
jungle products, was not agricultural income within the meaning
of the Act. The High Court took a contrary view, held that
tillage of the soil was not essential, and the income was agricultural income as human labour and skill had been expended on the
land itself and answered the question in favour of the assessee.
No attempt was, however, made by the Income-tax Authorities
to ascertain the income actually derived from the trees planted by
the assessee, nor were any materials placed on the record from
which its exact amount could be ascertained, but having regard
to the magnitude of the expenditure shown by the assessee as
against the total income this Court held that a substantial portion
of it must have been derived from the trees planted by the
assessee.
Held, that the income actually derived from the trees planted
by the assessee was agricultural income within the meaning of
s. 2(1) of the Indian Income-tax Act and no attempt having been
1957
May, 23
102
SUPREME COURT REPORTS
[1958J
19S1
made to ascertain its exact amount and a fresh enquiry being
The Commissioner u!'de~irable after such a long lapse of time, the appeal must be
of Income-tax,
d1sm1ssed.
Wc!rc!::fal
The term 'agriculture' in s. 2(l)(b)(i) of the Indian Income-tax
•·
Act connotes the entire and integrated activity of an agriculturist
Raja Benoy Kumar performed on the land in order to raise its produce and consists of
Sahas Roy
such basic and essential operations, requiring human skill and
labour on the land itself, as the tilling of the soil, sowing of the
seeds, planting and similar operations on the land and such other
subsequent operations, performed after the produce sprouts from
the land, as weeding, digging of the soil around the growth,
removal of undesirable under-growths, tending, pruning, cutting,
harvesting and marketing. But these subsequent operations, if
unconnected with the basic operations, cannot by themselves
constitute agriculture. It is only when the land is subjected to
such integrated activity, that it can be said to be used for
'agricultural purpose' and its income called agricultural income
within the meaning of the Act. .
Case-law discussed.
Whatever is produced by such agriculture must be an agricultural product and the ambit of the term 'agriculture' cannot be
confined merely to the production of grain and food for men and
cattle but must extend to all products of the land that have some
utility either for consumption or trade and commerce. Fruit and
vegetable plantations, groves, pastures, articles of luxury such as
betel, coffee, tea, spices, tobacco etc. or commercial crops
like
cotton, flax, jute, hemp, indigo etc. as also forest products such as
timber, sol and piyasal trees, casuarina plantations, tendu leaves,.
horranuts etc. can come within its ambit.
Murugesa Chetti v. Chinnathambi Goundan, (1901) I.LR. 24
Mad. 421 and Raja of Venkatagiri v. Ayyappa Reddy, (1913) I.LR.
38 Mad. 738, disapproved.
Such an extended meaning of the term 'agriculture' and it&
,
processes and products can be tenable only where there is cultivation, which means the basic operations, and can never be dissociated from them. There is, therefore, no warrc1.nt for its further
extension so as to include activities which are in some way
connected with or dependent on land, such as breeding and rearing of livestock, dairy-farming, butter and cheese making
and
poultry-farming.
Moo/ji Sicko & Co., In re, (1925) 10 T.C. 341 and Commissioner
of Income-tax v. K. E. Sundara Mudaliar, (1950) 18 l.T.R. 259,
disapproved.
Although human labour and skill are required both in the
performance of the basic as well as the subsequent operati~ns, it
is only in the case of the basic operations alone that such skill and
labour can be said to have been spent on the land itcself, and this
distinction becomes important where they arc disjointed and do
,.
S.C.R.
SUPREME COURT REPORTS
103
not form an integrated activity, as in the case of products of land
that are of spontaneous growth where hunian skill and labour are
spent merely in fostering the growth, preservation and regeneration of such products.
1957
The Commissioner·
of Income-tax,
West Bengal,
Calcutta
-Judicial opinion is unanimous that products which grow wild
v.
on the land or are of spontaneous growth and do not involve any Raja Benoy Kumar
human skill or labour on the land, and all that the assessee has.
Sahas Roy
to perform in respect of them is only to collect them for consump--
tion and marketing, are not products of agriculture and the income
derived from them is not agricultural income within the meaning
of s. 2(1) of the Act.
When, however, the assessee performs subsequent operations
on these products of land, the nature of those operations will
have to be determined in the light of the principles enunciated
above.
Held.further, that there is no basis for the argument that the·
demarcation of- agriculture and forestry as separate head~ of legislation in Entries 14 and 19 of List II of the Seventh Schedule to the
Constitution has the effect of making them mutually exclusive.
Income from forestry coming within the definition of 'agricultural
income' contained in s. 2(1) of the Indian Income-tax Act will be
agricultural income under Entry 46 and thus fall within
the
purview of that Act.
. CIVIL APPELLATE JURISDICTION : Civil Appeal No.
165of1954.
Appeal from the judgment and order dated May 27,
1953, of the Calcutta High Court in Income-tax
Reference No. 35 of 1952.
G. N. Joshi and R.H. Dhebar, for the appellant.
Jyotish Chandra Pal and D. N. Mukherjee, for the
respondent.
1957. May 23. The Judgment of the Court was
delivered by
BHAGW ATI, J .-This appeal with certificate of fitness
Bhagwati 1·
under s. 66A(2) of the Indian Income-tax Act (XI of
1922) is directed againstthe Judgment and order of
the High Court of Judicature at Calcutta on a reference under s. 66(1) of the Act.
The respondent owns an area of 6,000 acres of forest
land assessed to land revenue and grown with Sal and
Piyasal trees. The forest was originally of spontaneous
growth, "not grown by the aid of human skill and
104
SUPREME COURT REPORTS
(1958]
1957
laobur" and it has been in existence for about 150
1 he Commissioner years.
A considerable income is derived by the assessee
01 ,Income-tax, from sales of trees from this forest.
The assessment
JI est Bengal,
.
h. h h. ,.
.
1
d
d
[Calcutta
year m w 1c t 1s 1orest mcome was ast taxe un er
R . s'" v
the Indian Income-tax Act was 1923-24 but thereafter
a;a ''"'Y numar
d '11 1944 45
h' h .
h
·
Sahas Roy
an ti
-
w 1c
1s t e assessment year m quesJ(-. 1
tion, it was always left out of account. The assessment
,.8"'
0
"
•
for 1944-45 also was first made without including therein any forest income, but the assessment was subsequently re-opened under s. 34. In response to a
notice under s. 22(2) read with s. 34 of the Act, the
respondent submitted a return showing the
gro$s
receipt of Rs. 51,978 from the said forest. A claim
was, however, made that the said income was
not
assessable under the Act as it was agricultural income
and was exempt under s. 4(3) (viii) of the Act. The
Income Tax Officer rejected this claim and added a sum
of Rs. 34,430 to the assessable
income as income
derived from the forest
after allowing a sum
of
Rs. 17 ,548 as expenditure. The Appellate Assistant
Commissioner confirmed the assessment
and the
Jncome-tax Appellate Tribunal also, was of opinion
that the said income was not agricultural income but
was .income derived from the sale of jungle produce of
spontaneous growth and as such was. not covered by
s. 2(1) of the Act. At the instance of the assessee the
Tribunal referred to the High Court under s. 66(1) of
the Act two questions of law arising out of its order,
one of which was:
"Whether on the facts and in the circumstances
of this case, the sum of Rs. 34,430 is "agricultural
income" and as such is exempt from payment of tax
under section 4 (3) (viii) of the Indian Income-tax
Act?"
The Tribunal submitted a statement of case from
which the following facts
appear as admitted or
established :
"(i) The area covered by the forest is about 6,000
acres, trees growing being Sal and Piyasal;
(ii) It is of spontaneous growth being about 150
years old. It is not a forest grown by the aid of
human skill and labour;·
-
S.C.R.
SUPREME COURT REPORTS
105
(iii) The fores·t is occasionally parcelled out for
1957
the purposes of sale and the space from which trees The Commissioner
sold are cut away is guarded by forest guards to
01 Income-tax,
'
West Bengal,
protect offshoots;
Calcutta
(iv) It has
been
satisfactorily
proved
that R<rja Ben~y Kumar
.considerable amount of human labour and care is
Sahas Roy
being applied year after year for keeping the forest
Bhagwati .1.
alive as also for reviving the portions that get denuded
as a result of destruction by cattle and other causes;
(v) The staff is employed by the asscssee to
perform the following specific operations;
(a) Pruning, .
(b) Weeding,
(c) Felling,
( d) Clearing,
(e) Cutting of channels to help the flow of rain
water,
(f) Guarding the trees against pests and other
destructive elements,
(g) Sowing of seeds after digging of the soil in
denuded areas."
The Tribunal found that the employment of human
labour and skill in items (a) to (f) was necessary for the
maintenance and upkeep of any forest of spontaneous
:growth. Regarding item (g), however, it found that
the said operation had been performed only occasionally and over a small fraction of the area where the
original growth had been found to have been completely denuded. Such occasions were however few
and far between, the normal process being that whenever a tree was cut, a stump of about 6" height was
left intact which sent forth offshoots all round bringing about fresh growth in course of time. This went
on perpetually unless an area got ·otherwise completely
denuded.
The reference was heard by the High Court and the ·
High Court held that actual cultivation of the land
was not required and as human Jabour and skill were
spent for the growth of the forest the income from the
forest was agricultural income.
It accordingly
answered the above question in the affirmative. The
106
SUPREME
COURT REPORTS
[1958]
1957
Revenue obtained the requisite certificate of fitness
The commissioner for appeal to this Court and hence this· appeal.
0{v;:,c~,;',f·
The question that arises for consideration in this
Calcutta '
appeal is whether income derived from the sale of Sal
Raja Be!y Kumar and Piyasa/ trees in the forest owned by the assessee
sa1ras Roy
which was originally a forest of spontaneous growth
Bhagwati J.
"not grown by the aid of human skill and labour" but
on which forestry operations described in the statement
of case had been carried on by the assessee involving
considerable amount of expenditure of human skill and
labour is agricultural income within the meaning of
s. 2(1) and as such exempt from payment of tax under
s. 4 (3) (viii) ofthe Indian Income-tax Act.
Section 2(1) of the Act defines agricultural income
and states (so far as it is relevant for the purposes of
this appeal) :
(l) "agricultural income" means:
(a) any rent or revenue derived from land which
is used for agricultural purposes, and is either assessed
to land-revenue in the taxable territories or subject to·
a local rate assessed and collected by officers of the
Government as such :
(b) any income derived from such land by :
(i) agriculture, or
(ii) the performance by a cultivator or receiver
of rent-in-kind of any process ordinarily employed by
a cultivator or receiver of rent-in-kind to render the
produce raised or received by him fit to be taken to
market, or
(iii) the sale by a cultivator or .receiver of rent-·
in-kind of the produce raised or received by him, in
respect of which no process has been performed other
than a process of the nature described in sub-clause (ii); ...
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ ·-
Section 4(3) of the Act provides:-
"(3) Any income, profits or gains falling withinthe following classes shall not be included in the total
income of the person receiving them;
(viii) Agricultural income .................. "
S.C.R
SUPREME COURT REPORTS
107
Even though "agricultural
income" which
is
1957
exempted under s. 4(3) (viii) of the Act is defined in The Commissioner
s. 2(1) as above, there is no definition of "agriculture"
0·fv.1~co;:-';J·
or "agricultural purpose" to be found in the Act and
caJcu1"!: '
it therefore falls to be determined what is the connota- R . Bev. .,
•
.
-
a1a
noy .n.umar
tton of these terms.
sa1uu Roy
An argument based on entries 14 and 19 of List II
Bhagwati J.
of the Seventh Schedule to the Constitution may be
disposed of at once. It was urged that entry No. 14
referred to agriculture including agricultural education
and research, protection against pests and prevention
of plant diseases while entry No. 19 referred to forests
and there was therefore a clear line of demarcation
between agriculture and forests with the result that
forestry could not be comprised within agriculture.
If forestry was thus not comprised within agriculture,
any income from forestry could not be agricultural
income and the income derived by the assessee from
the sale of the forest trees could not be agricultural
income at all, as it was not derived from land by
agriculture within the meaning of the definition of
agricultural income given in the Indian Income-tax
Act. This argument, however, does not take account
of the fact that the entries in the lists of the Seventh
Schedule to the Constitution are heads of legislation
which are to be interpreted in a liberal manner
comprising within their scope all matters incidental
thereto. They are not mutually exclusive. If the
assessee plants on a vacant site trees with a view that
they should grow into a forest, as for example,
casuarina plantations and expends labour and skill
for that purpose, the income from such trees would
clearly be agricultural produce. It has to be remembered that even though this demarcation between
agriculture and forestry was available in the Lists
contained in the Seventh Schedule to the Government
of India Act, 1935, no such demarcation existed in the
Devolution Rules made under the Government of India
Act, 1919, and in any event the definition of agricultural income with which we are concerned was
incorporated in the Indian Income-tax Acts as early as
1886, if not earlier: vide s. 5 of the Indian Income-tax
108
SUPREME COURT REPORTS
(1958J
f 1957
Act 1886 (II of 1886). It has also to be remembered
The commi1Sio11er that in spite of this demarcation between agriculture
°;!;I":"~",J· and forests in the Constitution, taxes on agricultural
·~alcutta '
income are a separate head under entry 46 of List II
R . Be"· x
of the Seventh Schedule and would comprise within
0'"sa1i':YR0':"., their scope even income from forestry operations proBh•trivatl J.
vided it falls within the definition of agricultural
income which according to the definition given under
Art. 366(1) means agricultural income as defined for
the purposes of the enactments relating to Indian
Income-tax.
The terms "agriculture" and "agricultural purpose"
not having been defined in the Indian Income-tax Act,
we must necessarily fall back upon the general sense
in which they have been understood in common
parlance. "Agriculture" in its root sense means ager,
a field and culture, cultivation, cultivation of field
which of course implies expenditure of human skill
and labour upon land. The term has, however,
acquired a wider significance and that is to be found in
the various dictionary meanings ascribed to it. It may
be permissible to look the dictionary meaning of the
term in the absence of any definition thereof in the
relevant statutes. As was observed by Lord Coleridge
in R. v. Peters(') :
"I am quite aware that dictionaries are not to be
taken as authoritative exponents of the meanings of
words used in Acts of Parliament, but it is a wellknown rule of courts of law that words should be taken
to be used in their ordinary sense, and we are therefore sent for instruction to these books."
Cozens-Hardy, M.R., also said in Camden (Marquis) v. l.R. C. (') :
"H is for the Court to
interpret the statute as
best it may. In so doing the Courts may no doubt
assist themselves in the discharge of their duty by any
literary help they can find, including of course the
consultation of standard authors and reference to wellknown and authoritative dictionaries."
S.C.R
SUPREME COURT REPORTS
109
Turning therefore to the dictionary meaning of
1957
"agriculture" we find Webster's New International 11ie Commissioner
Dictionary describing it as "the art or science of of Income-tax,
cultivating the ground, including rearing and managew<!a1:':i'f%01•
ment of livestock, husbandry, farming, etc. and also
. . v.
including in its broad sense farming, horticulture, Ra
10/1f:YR~;"'ar
forestry, butter and cheese-making etc.". Murray's
Oxford Dictionary describes it a~ "the science and art
Bhagwati J.
of cultivating the soil; including the allied pursuits of
gathering in the crop and rearing livestock; tillage
husbandry, farming
(in the
widest sense)". In
..,,..
Bouvier's
Law Dictionary quoting the Standard
Dictionary "agriculture" is defined as "the cultivation of soil for food products or any other useful or
valuable growths of the field of garden;
tillage ;
husbandry; also, by
extension, farming, including
any industry practised by cultivator of the soil in
connection with such cultivation, as breeding and
rearing of stock, dairying, etc. The science that treats
of the cultivation of the soil".
In Corpus Juris the term "agriculture" has been
""
understood to mean : · "art or science of cultivating
the ground, especially in fields or large quantities,
including the preparation of the soil, the planting of
seeds, the raising and harvesting of crops, and the
rearing, feeding and management of livestock; tillage,
husbandry and farming. In
its gerleral s_ense the
word also includes gardening or horticulture".
Bhasyam Ayyangar J. in Murugesa Chetti v.
Chinnathambi Goundan (1) gave the following dictionary
meanings of agriculture a.s culled out from the Century
Dictionary anc! Anderson's Dictionary of Law:
"The primary meaning of agriculture
is the /
cultivation of the ground (The Century Dictionary)
and in its general sense it is the cultivation of the
ground for the purpose of procuring vegetables and
fruits for the use of man and beast including gardening
or horticulture and the raising or feeding of cattle and
other stock (Anderson's Dictionary of Law). Its less
general and more. ordinary signification is the cultivation with the plough and in large areas in order to raise
(1) (1901) I.L.R. 24 Mad. 421, 423.
IlO
SUPREME COURT REPORTS
[1958]
19$7
food for man and beast (The Century Dictionary) or,
The Commissioner in other words, "that species of cultivation which is
"//~co;e1".f intended to riase grain and other field crops for man
Ca/cu~': ' and beast." (Anderson's Dictionary of Law). HortiRqj B v. /(,
culture, which denotes the cultivation of garden or
'
0sa'f.":.'&;mar orchards, is a species of agriculture in its primary and
Bhagwati J.
more general sense."
Ramesam J.
in Panadai Pathan v Ramasami
Chetti (') referred to the following connotation of
'agricultrure';
"Wharton's Law Lexicon adopts the definition of
"agriculture"
in 8 Edw. VII, c. 36, as
including
"horticulture, forestry, and the use of land for any
purpose of husbandry etc. In 10 Edw. VII, c. 8 s. 41,
it was defined so as to include the use of land as
"meadow" or pasture land or orchard or osier or woodland, or for market gardens, nursery grounds or allotments, etc. In 57 and 58 Viet. c. 30 s. 22, the term
'agricultural property' was defined so as to include
agricultural land, pasture and woodland, etc."
These are the various meanings ascribed to the term
"
·"agriculture" in various dictionaries and it is significant to note that the term has been used both in the
narrow sense of the cultivation of the field and the
wider sense of comprising all activities in relation to
the land incl~ding horticulture, forestry, breeding and
rearing of livestock, dairying,
butter and cheesemaking, husbandry etc.
It was urged on behalf of the assessee that the
Court should accept the wider significance of the term
and include forestry
operations also within its
connotation .even though they did not involve tilling
of the land, sowing of seeds, planting, or similar work
on the land. The argument was that tilling of the land,
sowing of the seeds planting or similar work on the
land were no doubt agricultural operations and if they
were part of the forestry operations carried on by the
assessee the subsequent operations would certainly be
a continuation of the same and would therefore acquire
the characteristic of agricultural operations. But the
(1) (1922) I.L.R. 45 Mad. 710.
S.C.R.
SUPREME COURT REPORTS
111
absence of these basic operations would not necessarily
1957
make any difference to the character of the subsequent The Ccmmissioner
operations and would not divest
them of their o{v. lltCOme-':i,
character of agricultural operations, so that if in a
c~S:::: .
particular case one found that the forest was of Ra' n!'. .,
th
· f c
•
ga ,,.,,,oy ,.umQT
spontaneous grow , even so i
1orestry operations
Sa/tas Roy
were carried on in such forests for the purpose of
BhagwatiJ.
furthering the growth of forest trees, these operations
would also enjoy the character of agricultural opera·
tions. If breeding and rearing of livestock, dairying,
butter and cheese-making etc., could be compri~d
within the term "agriculture", it was asked, why
should these also be not classed as agricultural
operations.
Considerable stress was laid on the fact that
s. 4(3) (viii) of the Act enacted a provision in: regard to
the exemption of "agricultural income" from assessment and it was contended that exemptions should be
liberally construed. Reliance was placed on the observa~
tions of Vishwanatha Sastri J. in Commissioner of
Income-tax, Madras v. K.E. Sundara Mudaliar(1) :
"Exemption from tax granted by a Statute should
be given full scope and amplitude and should not be
whittled down by importing limitations not inserted
by the Legislature."
Mookerjee J. in Commissioner of Agricultural
Income -tax, West Bengal v. Raja Jagadish Chandra Deo
Dhabal . Deb (2) also expressed himself similarly :
"and the present day view seems to be that where
an exemption is conferred by statute, that clause 'has
to be interpreted liberally and in favour of the assessee
but must always be without any violence to the
language used. The rule must be construed together
with the exempting provisions, which must be regarded
as paramount."
He also quoted a passage from The Upper India
Chamber of Commerce v. Commissioner of Income-tax,
C.P.& U.P. (3) :
(1)[1950] 18 I.T.R. 259, 271.
(3) [1947] 15 I,T.R. 263, A.LR. 1948 All, 7n
(g) (1949] 17 I.T.R. 426, 438.
M2SC-S
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SUPREME COURT REPORTS
[1958]
1957
"It is needless to observe that, as in the present
The Commisswner case, we are concerned with the interpretation of an
of Inoome-tax, exemption clause in a taxing statute that clause must
West Bengal,
b
f;
'bl l'be 11
' d
d · f:
calcutta
e, as ar as poss1 e, 1 ra y construe an m avour
R . Bev.
v
of the assessee, provided no violence is done to the
a1a
noy ,,..u111ar l
d ,,
sa1ias Roy
anguage use .
Bhagwati J.
It was also pointed out that "Taxes on agricultural
income" formed a head of legislation specified in item
46 of List II of the Seventh Schedule to the Constitution and should be liberally construed, with the result
that agriculture should be understood in the wider
significance of the term and all agricultural income
derived from agriculture or so understood should be
included within the category. There was authority
for the proposition that the expression "agricultural
land" mentioned in Entry 21 of List II of the Seventh
Schedule to the Government of India Act, 1935, should
be interpreted in its wider significance as including
lands which are used or are capable of being used for
raising any valuable plants or trees or for any other
purpose of husbandry. [see
Sarojinidevi
v. Shri
Krishna Anjanneya Subrahmanyam (1) and Megh Raj v.
Allah Rakhia (').
While recognizing the force of the above expressions
of opinion we cannot press them into service in favour
of the assessee for the simple reason that "agricultural
income" has been defined in the Constitution itself in
Art. 366(1) to mean agricultural income as defined for
the purposes of enactments relating to Indian incometax and there is a definition of "agricultural income"
to be found in s. 2(1) of the Indian Income-tax Act.
We have therefore got to look to the terms of the
definition itself and construe the same regardless of any
other consideration, though, in so far as the terms
"agriculture" and
"agricultural
purposes" are
concerned, we feel free in view of the same not having
been defined in the Act itself to consider the various
meanings which have been ascribed to the same in the
legal and other dictionaries.
(1) I.L.R. (1945) Mad. 61
(2) [1942] F.C.R. 53,62.
S.C.R.
SUPREME COURT REPORTS
113
We may also note here the dictionary meanings of
1957
the terms "Forestry" and "Cultivation." The Shorter The c;;;;;;issioner
Oxford Dictionary, Vol I. page 735, gives the meaning of Income-tax,
of "forestry" as the "science and art of forming and
wc:i,::,i;:ai,
cultivating forest~, management of growing timber." R . B v. Kumar
Webster's New lnternationtal Dictionary, Vol. I,· a''Sat:J:~oy
page 990, gives the following meaning of forestry:
"Science and art of farming, caring for, or cultiBhagwati J. ·
vating forests; the management of growing timber."
Webster's New International Dictionary. Vol. I,
page 643, while talking of cultivation says that "to
cultivate" means "(i) to prepare, or to prepare and
use, for the raising of crops; to till; as to cultivate
the soil; to loosen or break up the soil about. (growing
crop or plants) for the purpose of killing weeds, etc.
especially with a cultivator, as to cultivate the corn;
(2) to raise, or foster the growth of, by tillage or
by labour and care;
to produce by culture; as to
cultivate roses; to cultivate oysters."
Whether the narrower or the wider sense of the term /
.. agriculture" should be adopted in a particular case
depends not only upon the provisions of the various
statutes in which the same occurs but also upon the facts
and circumstances of each case. The definition of the
term in one statute does not afford a guide to the construction of the same term in another statute and the
sense in which the terin has been understood in the
several statutes does not necessarily throw any light
on the manner in which the term should be understood
generally. The decided cases disclose a variety of
opinions in regard to the connotation of the terms
"agriculture" and "agricultural purposes." At one
time "agriculture" was understood in its primary
sense of cultivation of field and that too for production
of food crops for human beings and beasts. This
limited interpretation could not be adhered to even
though tilling of the land, sowing of the seeds, planting
or similar work on the land were the basic operations,
the scope of the crops produced was enlarged and all
crops raised on the land, whether they be food crops
or not were included in the produce raised by agriculture. There was however another school of thought
114
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which extended the term "agriculture" and included
The Commissioner within its connotation not only the products raised by
0{v~n;o;::;:"t• the cultivation of the land but also allied activities
ca1c.,1:'
which had relation to the land and operations which
Raja Be;:;,y Kumar had the . effect of fostering the growth,
~reservation
sa1ias Roy
and mamtenance as also the regenerat10n of the
Bhagwati J.
products of the land, thus bringing within its compass
not only the basic agricultural operations but also the
further operations performed on the products of the
land even though they were not necessarily accompanied by these preliminary basic operations. AB
against these cases which dealt with these preliminary
basic operations and also the further operations either
by themselves or•in conjunction with the former which
of course necessarily involved in the expenditure of
human skill and labour in carrying out those operations, there were instances of products of land which
grew wild or were of spontaneous growth without the
expenditure of human skill and Jabour and which it
was agreed on all hands could not be comprised within
"agriculture" and the income from which could not
fall within the definition of "agricultural income".
We shall briefly discuss the various cases dealing with
these different aspects and try to evolve some principle
therefrom which would serve as a guide in the determination of the question before us.
Kunhaven Haji v. Mavan (') was the earliest case in
which it was held that a lease of a coffee garden wai;
not an agricultural lease within the meaning of Transfer
of Property Act, s. 117. The case however concerned itself with the situation where as far as the
Court could gather from the Karar the lease was of the
coffee plants only. There was no further discussion of
the legal position and it may be noted that Shephard,
J., who was a party to this decision stated in the later
case of Murugesa Chetti v. Chinnathambi Gounden (2)
that he was wrong in the opinion he expressed with
regard to a coffee garden in this case.
Murugesa Chetti v. Chinnathambi Goundan (2) also
was concerned with s. 117 of the Transfer of Property Act. The lease there was a lease of land for
(1) (1893) l.L.R. 17 Mad. g8.
(2) [1901) l.L.R. 24 Mad. 421, 423.
S.C.R.
SUPREME COURT REPORTS
115
the cultivation of betel and the Court held that
1957
such a lease was an
agricultural
lease falling The commissioner
under s. 117. Bhashyam Ayyangar, J., who delivered of Income-tax,
the main judgment of the Court discussed
the
w~~1:;:at,
dictionary meanings of the term "agriculture" and
. v.
stated that in s 117 of the Transfer of Property Act it Ra;a Benoy Kumar
•
Sahas Roy
was used in its more general sense as comprehending
the raising of vegetables, fruits and other
garden
Bhagwati 1·
products as food for men or beast, though some of
them may be regarded in England as products of
horticulture as distinguished from agriculture. The
learned Judge considered the distinction between
"agriculture" and "horticulture" and observed :
''The distinction between agriculture when it is
used otherwise than in its primary and more general
sense and horticulture is a fine one even in England
and in India, especially, it will be impossible in the
case of several
products of the land to draw a line
between agriculture and
horticulture according to
English notions. The only practical distinction which
I can suggest and one which will give effect to the
policy
of the Legislature in exempting agricultural
leases from the operations of section 107, etc., of the
Transfer of Property Act is to regard as agriculture, as
distinguished from
horticulture,
not only all field
cultivation by tillage but also all garden cultivation
for the purpose chiefly of procuring vegetables or fuits
as food for man or beast and other products fit for
human consumption by way of luxury, if not as an
article of diet."
He then discussed the policy of exemption setting out
the observations of Cave. J. in Ellis & Co. v. Hilse (1):
"The very object of this exemption is the wellknown one of favourin$ agriculture-an old object of
English Legislation in favour of a very important
industry",
and stated:
"This observation of Mr. Justice Cave will apply
with much greater force in this country where the
agricultural industry is more important than in
England and is one that is common to wet cultivation
(') { 1889) L.R. 23 Q.B.D. 24.
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as to garden and dry cultivation, the object of all such
T'
c-;;;;;;;;sioncr cultivation being chiefly to procure food for men and
·~f Income-zax, cattle and other products
of the soil which are
wg~1!,,~7%
01
usually consumed by the people as gentle stimulants
v.
or by way of luxury. Betel leaf is an article of daily
Rai~ ~":,
0
~,:C,:
11110
' consumption with all classes in this
country
as
11
-
tobacco leaf is with most classes and betel vine is
Blwo,,-ur; 1•
generally grown side by side with
plantations, the
products of which are among the chief articles of
vegetable food."
The lease in that case being one for the cutivation
of betel was therefore held to be agricultural lease and
Shephard, J., agreed with this conclusion revising the
opinion which he had expressed earlier in Kunhavan
Haji v. Mavan (supra).
In Raja of Venkatagiri v. Ayyappa Reddy (') the
question was whether land usually fit only for pasturing cattle and not for cultivation, i.e., ploughing and
raising agricultural crops, was "ryoti" land, though it
might have been "old waste" and a tenant of such land
was a "ryot" and any amount agreed to be paid for
pasturing cattle was "rent" within the definitions of
s. 3 of the l\1adras Estates Land Act (Mad. 1 of 1908).
The Court held that such land was not "ryoti" land
inasmuch as it was not fit for ploughing and raising
agricultural crops. The ordinary meaning of "agriculture" was taken to be "the raising of annual
<:>r
periodical grain crops
through the operations of
ploughing, sowing, etc." (Per
Sadasiva Ayyar, J.,
at page 741).
The Chief Commissioner of Income Tax, Madras v.
Zamindar of Singampatti (') was a reference arising out
of the assessment for income-tax under Act VII of 1918
of the income derived by the Zamindar of Singampatti
from forests and fisheries within the ambit
of his
Zamindari. The assessee objected to the assessment
(i) on the ground that the income was agricultural
income within the meaning of s. 4 of the Act and
therefore, not chargeablP. to income-tax; (ii) that the
(1J [1913) I.L.R. 38 Mad. 738.
(•) [19,>]I.L.R. 45 Mad. 5•8 (F.D.)
S.C.R.
SUPREME COURT REPORTS
117
assessment was illegal as contravening the terms of
19~7
his permanent sanad for the Zamindari and the pro- The commissioner
visions of Regulation :XXV of 1802; The Court held
of Income-tax,
that where the peishkush of a permanently ' settled
wc~1:1:t~al,
estate was fixed in commutation not only of the . Be~. '/[,
rentals of the cultivated lands but also of all income Ra'~a11:'s
0~0;mar
which might be derived from forests or
fisheri~s,
both under the terms of the sanad and s. I of RegulaBhagwati 1·
tion :XXV of 1802, these incomes were exempt from
further taxation by the Government, and s. 3 of the
Income-tax Act did not abrogate this exemption. In
view of this conclusion the Court did not think it
necessary to determine whether income from forests
or fisheries came under the definition of "agricultural
income". The Court, however, pointed out that "a
reference to
Murray's
and Webster's dictionaries
shows that the word "agriculture", while sometimes
used in the narrow sense of the art or science of
cultivating the ground, is also used in a much wider
sense so as to include even "forestry'', according to
Webster. In which sense it was used by the framers
of the Income-tax Act would be a matter for determination and to this end it would not be out of place to
consider the probable reason for the exemption of
agricultural income from income-tax. No other reason
is suggested than the equity of exempting from further
burden income· which had already paid toll to the
State in the shape of land revenue."
The question, therefore, whether the income from
forests would be "agricultural income" within the
meaning of s. 4 of the Income-tax Act was thus· left
open and the decision that income from forests was
not liable to income-tax was reached under the terms
of the Sanad of s. I of Regulation No. 25 of 1802.
Kaju Mal v. Salig Ram (1) was concerned inter alia
with a field in which tea was grown and the question
was whether the land fell within the definition
of
"agricultural
income"
or "village imrooveable
property" as given in s. 3(i) and (ii) of the Punjab
Pre-emption Act, 1905. The Court held that fields
planted with tea bushes were fields used for agricultural
(1) [1919) P.R. No. 19. p. 237.
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SUPREME COURT REPORTS
[1958]
19s1
purposes and this decision was affirmed by the Privy
Tlze Commissioner Council in Kaju Mall v. Salig Ram (1). It was held
0fj,":,01;;,{g":J• that the words "agricultural purposes" in s. 2(iii) of
Calcutta
'
the Punjab Alienation of Land Act, 1900, included the
u,,;2 ne:~.v Kumar cultivation of tea;
consequently, land which was
Sa!'.as Roy
not occupied as the site of any building in a town or
liltagwati J.
village, and was occupied or let for the cultivation
of tea was "agricultural land" within the meaning of
s. 3(i) of the Punjab Pre-emption Act, 1905.
Emperor v. Probhat Chandra Barua (')was a case
under the Indian Income-tax Act and the classes of
income derived from permanently settled estates were
"1. Income from fisheries.
2. Income from land used
for stacking timber. 3. Income from pasturage." The
income from the first two heads was certainly not
agricultural
income or income derived from "land
which is used for agricultural purposes" within the
meaning of ss. 2 and 4 of the Act. But income derived
from pasturage was held to be agricultural income
which could not lawfully be charged with income-tax.
There was a difference of opinion between Rankin, J.,
and Page, J., in regard to the liability of income from
fisheries and income from land used
for stacking
timber based on the construction of the Permanent
Settlement Regulations of 1793. But that is immaterial
for our present purposes.
What is material is that
both the learned Judges were unanimous in
their
opinion
that income from
pasturage was income
derived from "land
which is used for agricultural
purposes" and was, therefore; within the exemption
given by s. 4(3) (viii) to agricultural income as defined
by s.2(l)(a) of the Act.
In Kesho Prasad Singh v.