HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
The Dooars Tea Co., Ltd. v. Commissioner of Agricultural Income-tax, West Bengal
Civil Appeal No. 381 of 1960
[1962] 3 SCR 157 ·
Bengal Agricultural Income-tax Act, 1944: sections 2(1)(b)(i)-(iii), 3, 7, 57, 63(1) and 64(2) · Rules under the Bengal Agricultural Income-tax Act: rule 4(1)-(2) · Constitution of India: Articles 135 and 366(1)
Sources & disclosures includedDownload original judgment / order
3-judge bench; unanimous judgment delivered by P. B. Gajendragadkar, J. · P. B. Gajendragadkar, J. · K. Subba Rao, J. · M. Hidayatullah, J.
Assessment years: 1949-50
01 · Facts of the case
The tea company cultivated bamboos, thatching grass and fuel timber through its labourers and used that produce in its own tea business instead of selling it. For assessment year 1949-50 the officer included Rs.39,849 as its market value; the company disputed both chargeability without sale and the existence of a valuation rule (SCR pp.159-161; PDF pp.3-5).
Source: Primary judgment: facts
02 · Discussion by the Hon’ble Court
Section 2(1)(b)(i) covered agricultural produce itself as income in kind; neither profit nor a sale was indispensable. The express treatment of processing and sales in the following clauses reinforced that reading, so the objection that nobody can trade with himself did not defeat this statutory charge. Rule 4(2) residually covered both off-market sales and produce never sold, permitting the prescribed market-value computation (SCR pp.162-171; PDF pp.6-15).
Source: Primary judgment: discussion
03 · Judicial decision
The appeal was dismissed with costs. Both reference questions—whether the own-used produce was agricultural income and whether rule 4 could compute it—remained answered in the affirmative (SCR pp.161, 170-171; PDF pp.5, 14-15).
Source: Primary judgment: decision
04 · Outcome / in whose favour
In favour of Revenue on chargeability and valuation machinery; the Rs.39,849 inclusion survived. The decision did not create a general rule taxing every internal business transfer (SCR pp.159-161, 167-171; PDF pp.3-5, 11-15).
Source: Primary judgment: outcome
05 · AKHB REVIEW POINT
AKHB analysis: identify the precise statutory income category before applying ordinary trading-profit assumptions. For own-used agricultural produce, retain cultivation, quantity, use and comparable local-price evidence and apply the correct valuation branch; this historical ruling is not present-law clearance.
Source: Primary judgment: review point
Source & verification
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Statutory scope
Historical Bengal agricultural-income-tax provisions and valuation rule; no current State-tax or later-treatment clearance.
Later treatment
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