The main legal point established in the judgment is the interpretation of the term 'agricultural land' under the Estate Duty Act, emphasizing the need to consider the nature of the land and interpret the term in its widest significance.

1. This is a reference made by the Madras Bench of the Income-tax Appellate Tribunal under S.64 (1) of the Estate Duty Act, 1953 on the application of the assessee. The question referred is: "Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in having included the value of the forest lands in the total value of the estate for the purpose of Estate Duty?"

2. The estate concerned in this case is that of Smt. Jayalakshmi Devi and Shri. Madhava Rajah of Kollengode, the former having died on 6th March 1954, and the latter on 9th May 1955. They were members of a Marumakkathayam tarwad; and each of them had admittedly a one-thirteenth share in the tarwad properties on the dates of their deaths. The tarwad had large extents of forest lands situate in the erstwhile Malabar District which was part of the State of Madras till the formation of Kerala on 111 1956. The assessee claimed that forest lands are agricultural lands, and they were not, therefore, liable to estate duty under the Estate Duty Act, 1953. In support of this claim, reliance was made on the decision of the Madras High Court in Sarojini Devi v. Sri Krishna AIR. 1544 Madras 401 which held that the expression 'agricultural lands' must be taken to include lands which are used or are capable of being used for raising any valuable plants or trees or for any other purpose of husbandry. The Appellate Tribunal, by its order dated 28th July 1964 rejected the assessee's claim holding that the above decision did not lay down a definition of the expression of agricultural lands for all purposes, and that it did not apply to cases under the Estate Duty Act. The question in this reference arose out of the above order: and it came for decision before a Bench of this Court in ITR. Case No. 75 of 1965, which was disposed of by the order pronounced on 26th August, 1966. This Court disagreed with the view of the Tribunal, and held that the term agricultural land should be interpreted in its widest significance. In support of the above view, reference was made by this Court to the decision of the Federal Court in Megh Raj v. Allah Rakhia AIR. 1942 PC. 27 and the Commissioner of Income-tax v. Benoy Kumar AIR. 1956 RC. 768, in addition to the decision of the Madras High Court above referred to. In this view of the matter, this Court directed the Appellate Tribunal to modify the statement of the case by incorporating therein a clear finding as to whether the forest lands concerned in this case were agricultural lands. Accordingly the Appellate Tribunal has submitted a supplementary statement; and the question has again come before us for decision in the present reference.

3. The supplementary statement and the report of the valuers which is Appendix F to this reference show that the forest lands belonging to the tarwad of the deceased on the relevant dates have an extent of 36,857 acres. Out of this, 16,040 acres are held by the State of Kerala on a 99 years lease; and the remaining 20,000 and odd acres are in the possession of the tarwad of the deceased persons. 5,000 acres out of the latter area are bare rock; and admittedly this area is neither cultivable nor useful for any purpose. This has been valued separately as non-agricultural land; and there is no dispute about it. The controversy relates only to the remaining extent of about 32,000 acres. The assessee produced a number of lease deeds before the Appellate Tribunal, and contended that the forest lands were of the same nature as taken in by the lease deeds, and were, therefore, agricultural lands. The Appellate Tribunal found that none of the lease deeds related to the forest lands in question; and it rightly held that these lease deeds cannot give any assistance in deciding whether the said forest lands are agricultural lands or not. Regarding the 15,000 and odd acres of land in the possession of the assessee's, tarwad, the Appellate Tribunal stated: "According to the valuer