Agriculture Income or not?

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Anuraag Sharma (Querist)
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14 April 2008 A person wants to sell the tree which had been planted by him 20 years back so that its wood can b used in wooden Industry.

but he is confused on the point that is the Money which he ll get in lieu of tree considered as Agricultural Income or income from other sources.

NOTE : The person is working in a private sector co. and has no occupation relating to Agriculture.

chetan soni

chetan soni (Expert)
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14 April 2008 Please refer the defination given in Sec. 2(1A) for agriculture income. As per this defination,
1. Land should be situated in india
2. Used for agriculture purpose

It is now where said that the owner of such land shuold do agriculture operations on the land.

So as per my opinion the said income will be agriculture income & exempt in Sec. 10(1).

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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14 April 2008 Where no basic operations are involved income is not agricultural - In order to decide whether the income received by the sale of trees in forests is agricultural income or not, the crucial question to be answered is; were those trees planted by the proprietors of the estate or did they grow spontaneously ? If it is the latter it would be wholly immaterial that the owner has maintained a large establishment for the purpose of preserving the forests and assisting in the growth of the trees, because ex hypothesis he performed no basic operations for bringing the forests into being - CIT v. Ramakrishna Deo [1959] 35 ITR 312 (SC). See also - Raja Mustafa Ali Khan v. CIT [1948] 16 ITR 330 (PC) and Sri Rajah Ravu Venkata Mahipathi Gangadhara Rama Rao Bahadur, Yuvarajah of Pithapuram v. CIT [1949] 17 ITR 445 (PC).