INDIAN TIMBER AND PLYWOOD CORPORATION LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, the Indian Timber & Plywood Corporation Ltd., Calicut, two questions of law were compelled for reference under Section 256(2) of the Act. The Income-tax Appellate Tribunal, Cochin Bench, has accordingly sent up its statement of the case and referred the following questions of law for our opinion, viz :

(2.) WHETHER, on the facts and in the circumstances of the case, the said receipts are not capital assessable under capital gains ?"

(3.) ON April 25, 1962, the assessee submitted a petition to the Chief Conservator of Forests with a working plan for exploitation of the forests. The working plan suggested a method of clearing the forest, replanting the same and raising eucalyptus, cardamom, etc., plantations. The Govt. of Kerala approved the working plan by G.O. dated August 6, 1962, subject to certain modifications. They also exempted the forests from the provisions of Section 3(2) of the Madras Preservation of Forests Act. Along with the Government order, a notification was also issued exempting the assessee from the operation of Section 3(2) of the Act for the year ended December 31, 1963. Similar notification had been issued granting exemption every year from December 31, 1964, to December 31, 1965. For the calendar year, 1967, it was notified that coup No. 13 of the Pozhuthana Malavaram would be exempt from Section 3(2) of the Act, for a period of one year (the year was taken to be the calendar year). For the year 1968, a similar notification was issued exempting coup No. 13. There was a further notification dated September 24, 1968, exempting coup No. 13 from compliance with Rule 7(b), which we have already noticed. The result was that the company was exempted from Section 3(2) for both the years and exempt from Rule 7(b) from January 1, 1968.