THE COMMISSIONER OF INCOME-TAX, BIHAR AND ORISSA versus SRI RAMAKRISHNA DEO

Citation: [1959] SUPP. 1 S.C.R. 176 · Decided: 14-10-1958 · Supreme Court of India · Bench: T.L. VENKATARAMA AIYYAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

176 
SUPREME COURT REPORTS (1959] Supp. 
r958 
pay only three sets of costs for the hearing, namely, 
one set each to the petitioners represented by Shri 
Sh1ee Vinod 
Kuma' &- 0 ,,. Achhru Ram, Shri D. R. Prem and Shri Y. Kumar 
v. 
respocti vely an<l also one set of hearing fees for each 
State of Ilimachal of the au vocates-on-record. 
Prridesh 
Das C. ]. 
October r4. 
Petitions allowed. 
THE COMMISSIONER OF INCOME-TAX, 
BIHAR AND ORISSA 
v. 
SRI RAMAKRISHNA DEO 
(VENKATARAMA ArYAR, GAJENDRAGADKAR and 
A. K. SARKAR, JJ.) 
focome Tax-Forest trees-Income from sale of-Whether 
agricultural income-Exemption from taxatio1>-Burden of proof-
Findings of the Tribunal-When binding on High Court-Indian 
Income-tax Act, r922 (XI of r922), ss. 2(r), 4(3) (viii), 66(r). 
The respondent, the proprietor of an estate, derived income 
from the sale of trees growing in his forests and claimed that it 
was agricultural income as defined in s. 2(1) of the Indian 
Income-tax Act, 1922, and that it was exempt from payment of 
income-tax under s. 4(3)(viii). The Appellate Tribunal found 
that the evidence to show that there was plantation by the 
estate authorities was meagre and unsubstantial, that the trees 
in question must have been of spontaneous growth and that the 
respondent had failed to establish facts on which he could claim 
exemption. On reference, the High Court took the view that 
though trees in the forest had not been planted by the estate 
authorities, the latter had performed subsequent operations of a 
substantial character for the maintenance and improvement of 
the forest, and that the income vvas, therefore, agricultural 
incorne. 
It also held that the onus was on the income-tax 
authorities to prove that the income derived from the sale of 
trees was not agricultural income and that they had failed to 
show that the income fell outside the scope of the exemption 
mentioned in s. 4(3)(viii) of the Act. 
Held, that the High Court erred in placing the burden on 
the income-tax authorities to prove that the income sought to be 
taxed was not agricultural income. The principle has been well-
established that where a person claims the benefit of an exemp-
tion under the provisions of the Act, he has to establish it. 
(1) S.C.R. SUPREME COURT REPORTS 
177 
Commissioner of Income-tax v. Venkataswamy Naidu, [1956] 
z958 
291.T.R. 529, followed. 
-. . 
The question whether the trees were of spontaneous growth The Commissioner 
or were products of plantation was essentially a question of fact 
0( lncome·T~x, 
and the finding of the Tribunal on this point was binding on the Bihar and Orissa 
High Court in a reference under s. 66(1) of the Act. 
v. 
. 
. 
Sri Ramakris/111a 
Held, further, that the mcome received by the resI?ondent 
D 
by the sale of trees in his forests was not agricultural income as 
eo 
the trees had not been planted by him, and that it was 
immaterial that he had maintained a large establishment for the 
purpose of preserving the forests and assisting in the growth of 
the trees. 
The Commissioner of Income-tax, West Bengal, Calcutta v. 
Raja Benoy Kitmar Sahas Roy, [1958] S.C.R. IOI, explained and 
followed. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 
426 of 1957. 
Appeal from the judgment and order dated April 21, 
1955, of the Orissa High Court at Cuttack in Special 
Jurisdiction Case No. 179 of 1951. 
A. N. Kripal, R. H. Dhebar and D. Gupta, for the 
appellant. 
A. V. Viswanatha Sastri, M. S. K. Sastri and R. 
J agannatha Rao, for the respondent. 
1958. October 14. The Judgment of the Court was 
delivered by 
VENKATARAMA AIYAR, J.-This is an appeal against 
the judgment of the High Court of Orrissa in ar eference 
under s. 66(1) of the Indian Income-tax Act, 1922, 
hereinafter referred to as the Act, and the point for 
decision is whether income received by the respondent 
by the sale of trees groing in his forests is agricul-
tural income exempt frm taxation under s. 4(3)(viii) 
of the Act. 
The respondent is the proprietor of the impartible 
zamin of Jaipur in Koraput District. The estate is of 
the area of 12,000 sq. miles of which 1540 sq. miles 
are reserve forest and 100 sq. miles, protected forest. 
The respondent derives income from the forests by the 
sale of timber such as teak, salwood, lac, myrabolam, 
tamarind, cashewnuts and firewood. 
There is no 
23 
Venkatarama 
Aiyar. J. 
178 
SUPREME COURT REPORTS [1959] Supp. 
z95B 
dispute either as to the receipt of such income or as to 
C -

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