V. VENUGOPALA VARMA RAJAH vs COMMISSIONER OF INCOME-TAX, KERALA

The Supreme Court held that the income received from the clear felling of trees, where stumps are left to allow regeneration, is of a capital nature and not taxable as income under the Income-tax Act, 1922. The Court emphasized that the term 'clear felling' implies that the trees are cut without removing the roots, allowing for future growth. The appeal against the High Court's order was dismissed, affirming the Tribunal's decision that the income was not taxable.