Hegde, J.:— This is a reference under section 66(1) of the Indian Income-tax Act, 1922. The question of law referred is:
“Whether, on the facts and circumstances of the case, the sum of Rs. 5,872 is a capital or a revenue receipt?”
2. The Income-tax Officer and the Appellate Commissioner came to the conclusion that the same is “income”, whereas the Income-tax Appellate Tribunal came to the conclusion that it is “capital.”
3. The material facts of the case are as follows:
The assessee purchased a coffee estate on October 9, 1934, for a sum of Rs. 22,009. Even on the date of the purchase, coffee plants had been planted in a portion of that estate and the rest was jungle. Year after year, he cleared portions of the jungle for the purpose of planting coffee. The cleared jungle was sold by him. The question for decision is whether the price realised by him by the sale of the trees is “income”.
4. The facts found by the Tribunal which finding is binding on us are as follows:
“The assessee did not either inherit or purchase a forest. He only parted with his capital to acquire a coffee estate; part of that coffee estate consisted of trees. These trees were sold.”
5. It is not the finding of the Tribunal that the trees sold had spontaneously grown after the purchase was made; nor is there any finding that the trees sold were immature on the date of the purchase and that they became mature on the date of sale. From the finding of the Tribunal it is seen that the very trees purchased as part of the purchase transaction were sold. On the basis of this finding, the only conclusion possible is that the price realised by the sale of those trees is a capital and not a revenue receipt.
6. Our answer to the question of law referred is that on the facts and circumstances of the case, the sum of Rs. 5,782 is a capital receipt and not a revenue receipt. No costs.
7. Reference answered accordingly.