P MOHAMED Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) THIS tax revision case, at the instance of the assessee, under section 54(1) of the Tamil Nadu Agricultural Income-tax Act, 1955 (hereinafter referred to as "the Act"), has been preferred against the order of the Tamil Nadu Agricultural Income-tax Appellate Tribunal, Madras, in A.T. No. 84 of 1990 relating to the assessment year 1987-88.

(2.) THE assessee had entered into an agreement on July 5, 1984, with one Sastha in respect of 1, 100 rubber trees that stood on an extent of ten acres, which belonged to Sastha. In order to appreciate the controversy arising for decision in this revision, it would be necessary to refer to the terms of the agreement. THE agreement recited that as 1, 100 rubber trees had become old and the yield of latex had reduced and the incurring of further expenditure would not yield results, but would result in wasteful expenditure, the owner of the land and the rubber trees decided that it would be advantageous to slaughter the trees and the assessee agreed to do so on payment of a consideration of one and a half lakhs of rupees.

(3.) THE agreement, and not the land, was the source of the income in so far as the assessee was concerned. THEre is also absence of nexus between income, land and agricultural operations. Under section 2(a)(2)(ii) of the Act income derived from such land by 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, would be "agricultural income". In this case, as pointed out earlier, the source of the income is not the land, but only the agreement. Further, the assessee is neither a cultivator nor receiver of rent-in-kind and under the terms of the agreement, the assessee need not do anything to render the produce received by him marketable. Even under section 2(a)(2)(iii) of the Act, in order to be assessable as agricultural income, the income should be derived from such land by 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). Earlier, it had been pointed out that the dominant intention as can begathered from the terms of the agreement is the annihilation of the trees and that slaughter tapping, as a step taken in that direction, cannot be regarded as the sale of the produce raised by a cultivator nor as produce received by him in respect of which no process has been performed, other than that of rendering it fit to be taken to market.