RAMAKRISHNAN J.

This revision case against the order of the Agricultural Income-tax Tribunal raises a short question as to whether the sale proceeds of casuarina trees and charcoal by the liquidator of the assessee-company, after the liquidation had commenced, is liable to be assessed to agricultural income-tax under the Madras Act, V of 1955, at the maximum rate of 45nP. in the rupee fixed under the provisions of that Act for the assessment of agricultural income-tax on companies. The facts of the case as found by the authorities below, including the Appellate Tribunal, can be briefly put down The company was formed under its memorandum of association for raising casuarina plantations in the lands belonging to the company in Chidambaram Taluk, South Arcot District, and realising the income from the sale of such casuarina plantations. Though it was not specifically referred to in the memorandum of association, it is common ground that charcoal was also manufactured and sold by the company as part of its activities. The company went into voluntary liquidation on December 28, 1958, and a liquidator was in charge thereafter. During the periods December 28, 1958, to March 31, 1959, and April 1, 1959, to September 30, 1959, which are included in the accounting year with which we are concerned, the company was found to have effected sales of casuarina trees and charcoal for Rs. 1, 710.88 and Rs. 5, 015 respectively. Deducting certain items of expenditure, the net income came to Rs. 5, 549-69. Subsequently, on appeal to the Appellate Assistant Commissioner, the expenses for cultivation were enhanced on a proportion basis, and the net income was assessed at 45nP. It is also in evidence that the liquidator subsequently on September 30, 1959, sold away the lands

The first contention urged by the petitioner before us as well as before the lower Appellate Tribunal was that a company which had gone into liquidation cannot thereafter be assessed in respect of its realisations at the higher rate applicable to companies. Reliance was placed upon the decision of the Supreme Court in Liquidators of Pursa Ltd. v. Commissioner of Income-tax. But that decision did not lay down the proposition canvassed by the petitioner's counsel. It dealt mainly with the manner in which section 10(2)(vii) of the Income-tax Act had to be applied. At page 274 of the report, the Supreme Court observed that the machinery and plant which were sold had not at all been used for the purposes of the business carried on in the accounting year and, consequently, the second proviso to section 10(2)(vii) could have no application to the sale proceeds of such machinery and plant. It is also necessary to state that in the Supreme Court case, the machinery and plant were sold during the proceedings of winding up, and in the accounting year it was found that the company never had used the machinery and plant for the purpose of manufacturing sugar, which was the business for which the company had been formed, except to keep them in trim and in running order. But, apart from this, there are certain other observations of the Supreme Court in the self-same decision at page 275 of the report, which lends support to an inference that even after winding up had commenced, there can be occasions where the liquidator can carry on the business of the company. It is observed

"Even if the sale of the stock of sugar be regarded as carrying on of the business by the company and not a realisation of its assets with a view to winding up, the machinery or plant not being used during the accounting year at all and in any event not having had any connection with the carrying on of that limited business during the accounting year, section 10(2)(vii) can have no application to the sale of any such machinery or plant." *

The next decision cited before us was a decision of this court in Ajax Products Ltd. v. Commissioner of Income-tax, which also dealt with the interpretation of section 10(2)(