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2011 (10) TMI 154 - KARNATAKA HIGH COURTAgriculture income - Exemption u/s 10(1) - Revision u/s 263 - The Assessing Officer having selected the case for scrutiny issued notice to the assessee to explain the sudden change of source of income from "business" to "agricultural" income on the face of the activity not being changed. Assessee replied that on acquiring knowledge through various mediums, an opinion on the activity of the firm was sought for and as opined by the experts, the firm decided to change the heading of income from "business income" to "agricultural income". - AO concluded that, "After verification of facts brought on record by the assessee, the contention of the assessee that the income derived from the above activities is by performance of agriculture is accepted" - Held that:- there was no discussion as to how the said conclusion was arrived at except extracting the contentions of the assessee. There was no consideration of the facts as pleaded by the assessee itself for the previous assessment years or the assessment years in question. Thus, there was an incorrect assumption of facts or incorrect application of law which would satisfy the requirement of order being erroneous. - Revision of order by CIT upheld. Whether the Tribunal was right in holding that the income derived by the assessee from manufacturing of seeds and sale of the same would amount to agricultural income which would be exempted u/s. 10(1) of the Income-tax Act. - Held that:- Income earned by the assessee is not agricultural income. - Decided against the assessee.
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