1. This is a reference by the Income-tax Appellate Tribunal, Madras Bench, under S.66 (1) of the Indian Income-tax Act, 1922. The question referred is:

"Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that the income from the sale of latex after its conversion into sole crepe was agricultural income under S.2 (1) (b) (ii) of the Indian Income-tax Act, 1922?"

2. S.2 (1) of the Act defines the expression "agricultural income" and S.4 (3) (viii) of the Act provides that "agricultural income" shall not be included in the total income of an assessee. The relevant portion of the definition reads as follows:

"agricultural income' means

(a) any tent or revenue derived from land which is used for agricultural purposes, and is either assessed to land revenue in the taxable territories or subject to a local rate assessed and collected by officers of the Government as such;

(b) any income derived from such land by

(ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market."

3