PARTHASARATHIAH AND BROS A T Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE are reference under section 66(1) of the Indian Income-tax Act (to be referred to as the "Act" hereinafter).

(2.) IN both these references, a common question of law has been referred for our decision. That question is :

(3.) THE language of section 2(1)(b)(ii) does not appear to justify the contention of the revenue that for claiming the benefit of section 2(1)(b)(ii) the process employed by the assessee must be of such character as just to make the produce marketable. This interpretation ignores the words "ordinarily employed". THE interpretation put by the learned counsel for the revenue about the true scope of section 2(1)(b)(ii) appears to us extremely narrow. THE true test, according to us, is what is the process ordinarily employed by the cultivators of any particular locality to render the produce raised by them fit for market. THE process adopted in one locality may not necessarily be adopted in another locality. In some places paddy as such is sold; yet in other places usually it is converted into rice, before it is sold. In other words, the "market" referred to in the provision is a ready and willing "market" where the produce has to be dumped.