CHAKRAVARTTI, C.J. - (1.) THIS reference under s. 63(1) of the Bengal Agrl. IT Act comes back to us after remand.
(2.) THE assessee is a public limited company, called the Dooars Tea Co. Ltd., carrying on the business of growing, manufacturing and selling tea. For the accounting year 1948, relative to the asst. yr. 1949-50, the company returned an agricultural income of Rs. 3,45,702. THE Agrl. ITO increased that amount to Rs. 4,41,940 including therein a sum of Rs. 39,849 as the market value of the assessee's agricultural income from bamboo, thatch and fuel timber. THE assessee objected to the addition of that sum on two grounds which I shall specify later. The factual position with regard to the bamboo, thatch and fuel timber has been found to be as follows : The company hold a large tract of land under a lease from the local Government and in a part of it they grow bamboos, thatching grass and fuel timber. During the calendar year 1948, they cut down some bamboos, some thatching grass and some fuel timber and utilised the same for the purposes of their business. The bamboos, thatching grass and fuel timber were grown by the assessee company on their own land by agricultural operation carried on by their servants and labourers, but after they had been grown, they were merely utilised by the company for the purpose of their tea business and not sold in the market or sold at all. It has now been found that such utilisation of bamboo, thatching grass and timber took place every year. The thatching grass had to be cut every year, because otherwise it would deteriorate and normally, the assessee company also used the grass every year. Bamboos and fuel timber were cut as and when necessary and normally some bamboos and some timber were cut every year. There was no absolute regularity as regards such cutting and appropriation, but since, in practice, the cutting and the using of the grass, bamboos and timber took place every year, such regularity as was constituted by such annual use could be predicated. The assessee's contention before the IT authorities was that the bamboos, thatching grass and fuel timber, though cut down and utilise, did not constitute agricultural income within the meaning of the definition in the Act, inasmuch as the same had not been sold. In the assessee's view, agricultural produce grown by a person on his own land could not possibly be his income so long as it remained on the land or even so long as it was merely cut down or gathered or even so long as it was merely utilised by such person for his own purposes. It would become income only if it was sold and if it brought in its value in money from third parties as its price. The Department's view was that the several varieties of agricultural produce, grown and utilised by the assessee company, were themselves agricultural income and the fact that they had not been sold was immaterial. The Tribunal overruled the assessee's contention and held that the bamboos, grass and fuel timber which the assessee company had appropriated to their own use, did constitute their agricultural income, though; they had been grown by the assessee company on their own land and with their own labourers and though they had not been sold. The market value of the produce had, therefore, been properly brought to tax.
(3.) BEFORE the taxing authorities and finally before the Tribunal, the assessee company raised a second contention. They contended that even assuming that agricultural produce grown by a person on his own land could become his agricultural income, if he appropriated it to his own use, its market value could not yet be computed in money, inasmuch as no rule had been framed for its computation. Rule 4 of the Rules framed under the Act which the taxing authorities had applied was said to be not applicable, because, in the assessee's view, the rule applied only when agricultural produce was sold and the only two contingencies contemplated were that it had been sold in the market or had been sold otherwise than in the market. Agricultural produce not sold at all was, in the assessee's view, not within the ambit of r. 4. The second contention of the assessee company also failed to find favour with the Tribunal although in their appellate order they did not deal with it specifically. The assessee company next required the Tribunal to refer the questions raised by them for the opinion of this Court and in due course the Tribunal referred the two following questions : "(1) Is bamboo, thatch, fuel etc., grown by the assessee company and utilised for its own benefits in its tea business, agricultural income within the meaning of the Bengal Agrl. IT Act ? and (2) If the answer to question (1) be in the affirmative, can such income be computed under r. 4 of the Rules framed under the Act ?" When the reference came up for hearing, this Court felt some difficulty in regard to both the questions. The first question had been framed in general terms and did not merely ask whether in order that agricultural produce might constitute agricultural income within the meaning of the Act, it was essential that the same should be sold in the market. It asked a broad question and invited this Court to say whether, in the circumstances stated, the agricultural produce could be income at all. It appeared to us that if this Court was to answer the general question as to whether agricultural produce grown by a person on his own land and utilised for his own purposes could, on account of its nature, be income at all, it was not sufficient to know that it had been obtained by the assessee company from their own lands, cultivated by their own labourers and appropriated to their own use. It would be necessary to know further whether there had been any regularity or periodicity in the growing of the produce and in the use of it for the assessee company's own purposes, because, if the use made of such produce had been only on an isolated occasion in a particular year that circumstance alone might prevent it from being treated as an income, although in its nature it might be a receipt of an income character. As I observed on the previous occasion, if a person grows crops on his agricultural land, he will necessarily have to harvest them and some kind of periodicity is implicit in the cultivation of crops. If, on the other hand, an assessee grows plants and trees or even grass on his agricultural land and leaves them standing, without cutting them or appropriating them in any way, it will be at least doubtful whether such trees and plants would constitute his agricultural income. If, to go a step further, a person grows a forest for his pleasure, as it were and does not usually draw upon it for extraction of timber, but once in a way, say on a single occasion in ten or twenty years, he cuts down some of the trees and appropriates them, it will again be doubtful whether such drawings would constitute his income. But the case might be different if an assessee grew timber or grass on his own land and cut and appropriated the trees or grass habitually either every year or as and when his needs required with some kind of regularity. We considered it important to know what the true position in the present case was and accordingly remanded the case to the Tribunal in order that they might find and state to this Court whether the assessee company were in the habit of utilising bamboos, thatching grass and fuel timber grown by them on their own land with some kind of regularity as and when the purpose of their business required. As I have already stated, the Tribunal have now returned a finding in the affirmative.;