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2011 (1) TMI 265 - HC - Income TaxScrap rubber - agricultural income and Income- taxable under the Central Act. - appeal filed by the revenue is whether 35 per cent of the income received by the respondent-assessee on sale of scrap rubber could be brought to central Income-tax by applying Rule 7A of the Income-tax Rules, 1962 - The sale of tree scrap, shell scrap & earth scrap etc items of scrap rubber cannot be brought to Central Income-tax by applying Rule 7A above referred because such scrap is generated in the course of taking yield which is purely an agricultural operation - However, if any scrap is generated in the industrial activity in which products referred to in Rule 7A are made, certainly such scrap rubber is also an item assessable to Central Income-tax by applying Rule 7A(1) - In fact all items of rubber products or intermediaries and bye products and scrap obtained while processing rubber latex to make the products referred to in Rule 7A are assessable to Central Income-tax and agricultural Income-tax in the ratio stated in the said rule - allow the appeal by setting aside the order of the Tribunal and that of the CIT (Appeals) and by remanding the matter to the Assessing Officer to verify whether income from scrap assessed is obtained in the course of agricultural operations that is in the course of taking yield or whether it is industrial scrap generated in producing rubber products covered by Rule 7A
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