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2011 (11) TMI 373 - AT - Income TaxAgricultural Income vs Business Income – establishment of green house - floriculture project - rose plants were planted on the bridge of plastic tray erected, with the help of MS stand, 2-3 ft. above the land - Revenue contention that plants were not planted on the earth land and no basic agricultural operation was carried out – reduction of subsidy received from cost of plants reversed by CIT(A) - dis-allowance on account of non- deduction of TDS – other dis-allowances – Held that:- It is not in dispute that the agricultural land was acquired by the assessee from agriculturists and mother plats are always been grown on the agricultural land. Normal agricultural activity like planting, cutting, weeding, tilling and watering etc. were carried out by assessee. CIT(A) has given a finding that the assessee had factually established the nexus between income, land and agricultural operation. Thus, income in question cannot be included in total income being within the ambits of the provisions of Section 10(1) of the Act. CIT(A) reversed the order of A.O. and added back the subsidy on ground that subsidy received by the assessee did not relate to the acquisition of the rose plants but in creating infrastructure. Since new facts in respect of grant of subsidy were recorded by CIT(A) hence the issue is restored back to first appellate authority to verify exact nature of subsidy granted to the assessee and then decide the issue. In respect of other dis-allowance it is held that whatsoever be the addition, the same shall qualify for the exempted income being part and parcel of the agricultural income. Therefore the deletion of addition is hereby affirmed. - Decided partly in favor of Revenue.
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