Satyanarayana Raju, J. - (1.) This is an appeal, by special leave, against the order of the High Court of Kerala dated August 2, 1963, in Income- tax Reference Case No. 48/62 (Agricultural).
(2.) The facts leading to this appeal may be briefly stated. The respondent is a company which owned a rubber estate purchased by it along with the plantation thereon. The estate included rubber trees which, at the time of purchase, were in a condition of producing latex. The rubber trees were sold by the company after they ceased to yield latex any further. In computing its agricultural income for the accounting year ending February 28, 1959, relevant to the assessment year 1959-60, for the purposes of the Kerala Agricultural Income Tax Act, 1950 (XXII of 1950), the Assistant Commissioner of Agricultural Income-tax, by his order dated February 2, 1962, included the sum of Rs. 8,532.50 representing the sale proceeds of rubber trees which were cut down and sold after they became useless. The respondent appealed to the Deputy Commissioner of Agricultural Income-tax and Sales Tax, Quilon, objecting, inter alia, to the inclusion of the amount in computing its agricultural income.
(3.) By order dated November 30, 1960, the Deputy Commissioner rejected the contention of the respondent. The respondent thereupon preferred a second appeal to the Agricultural Income-tax Appellate, Tribunal, Trivandrum. By its order dated August 18, 1962, the Tribunal accepted the contention of the respondent and held that the sum of Rs. 8,532.50 representing the sale proceeds of rubber trees cut down and sold after they had become useless was not taxable as income, but was merely a capital receipt.;