The meaning of "agricultural land" in Section 2 (e) (i) of the Wealth Tax Act is land ordinarily used for the purpose of agriculture or for purposes subservient to or allied to agriculture.

( 1 ) THIS is a reference under Section 27 (1) of the Wealth Tax Act (XXVII of The assessee Srimathi Manyam Meenakshamma, a resident of Rajahmundry was assessed to a total wealth of Rs. 5,19,191by the Wealth Tax Officer in regard to the assessment year 1957-58 for which the relevant valuation date is 31-3-1957. She owned extensive immovable properties, including forest and agricultural lands and buildings situated at various places. The forest measuring about 200 sq. miles was valued by her at Rs. 21,000. The Wealth Tax Officer, however, determined its value to be Rs. 2,00,000 as he found that the average income during the last three assessment years was Rs. 10,000 and capitalized this income 20 times. The agricultural lands had been taken over by the Government under the Estates (Abolition and Conversion into Ryyotwari) Act (XXVI of 1948 ). The Wealth Tax Officer included the balance of Rs. 71,279 of the compensation amount payable to the assessee in her total wealth for the purpose of the assessment. As regards the buildings, it is relevant only to mention that a house property at Yanam was valued by the assessee at Rs. 5,000 but the Wealth Tax Officer fixed it as Rs. 50,000.

( 2 ) THE assessee appealed to the Appellate Assistant Commissioner contending that the forest was not worth even Rs. 40,000, because the acquisition of the forest by the Government was under consideration. With regard to the compensation to be received from the Government, she contended that it was not an ascertained or definite amount but depended on the survey and ryotwari settlement. In respect of the house property at Yanam, she objected that its valuation at Rs. 50,000 was excessive. The Appellate Assistant Commissioner negatived the first two contentions of the assessee but reduced the valuation of the house property at Yanam, from Rs. 50,000 to Rs. 40,000.

( 3 ) THE assessee took the mater on a further appeal to the Income-tax Appellate Tribunal. Besides the points urged befire the Appellate Assistant Commissioner, she contended that the forest lands constituted agricultural lands, that the house property at Yanam was situated that the house property at Yanam was situated outside the Union territory and that these could not be included in her total wealth. The Tribunal held that the forest lands were not agricultural lands because no act of husbandry was performed thereon and the tree in the forest were of spontaneous growth. On the question as to the house property at Yanam, it held that the territory was under the de facto jurisdiction of the Government of India and that the assessee was only entitled to rebate of tax as provided under the law in view of the territory having not been acquired de jure by the Government of India. In respect of these two items, it merely reduced the market value of the forest lands to Rs. 1,50,000 and of the house property at Yanam to Rs. 25,000.

( 4 ) UPON the application of the assessee the following questions of law were referred us by the Tribunal: 1. Whether the forest lands, trees in which are of spontaneous growth, constitute agricultural lands within the meaning of Section 2 (e) (i) of the Wealth Tax Act and liable to exemption? 2. Whether the Department was right including in the total wealth of the assessee the sum of Rs. 71,279 being the probable amount of compensation receivable by the assessee from the Government under the Madras Estates (Abolition and Conversion into Ryotwari) Act of 1948? and 3. Whether the value of the property situate in Yanam was includible in the total wealth of the assessee?

( 5 ) IT will be convenient to refer to the Wealth Tax Act (XXVII of 1957) hereinafter referred to as the Act. In connection with the first question, Sri I. Vishnu Rao, the learned counsel for the assessee, urged before us that the entire estate including the forest lands was taken over in 1953 by the Government under the Estates (Abolition and Conversion into Ryotwari) Act XXVI of 1948 and