Judgement

T. L. YENKATARAMA AIYAR, J. : This is an appeal against the judgment of the High Court of Orissa in a reference 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 growing in his forests is agricultural income exempt from taxation under S. 4 (3) (viii) of the Act.

2. 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, myrobalan, tamarind, cashewnuts and firewood. There is no dispute either as to the receipt of such income or as to its quantum. All that appears in the account books of the respondent. The point in controversy is as to whether this income is chargeable to tax. It is the contention of the respondent that this is agricultural income as defined in S. 2 (1) of the Act, and that it is, in consequence, exempt under S. 4(3) (viii). By his order dated January 31,1943, the Income-tax Offi