Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2017 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 384 - HC - Income TaxAgricultural income or not - turnkey contract of plantation - to create and develop plantations, rock gardens etc. for companies/institutions - splitting the income derived from the turnkey contract of plantation in two different stages - income received at the second stage - interest in land - executors of trust - Held that:- Executor had a right to receive remuneration for management of the trust and its properties. The Assessee's contention was that the income received by him is agricultural income was negatived by the Apex Court in Maharajadhiraj Sir Kameshwar Singh .vs. CIT [1960 (10) TMI 5 - SUPREME Court] as it held that he had no interest in the land and what the Executor received was the salary/remuneration to take care of the properties of the trust. The aforesaid decision is sought to be distinguished by the appellant on the ground that the appellant is deriving its income from actually cultivating the land. The income received is for agricultural activity and for no other activity. This distinction does not take note of the fact that the activity carried out by the appellant would not decide whether the remuneration received is agricultural income or not, but whether the income is derived from land. For any income to be classifiable as agricultural income, it has primarily to be derived from land In the present facts, no agricultural income is derived by the appellant from the land. It receives consideration for providing Services under the contract dated 23.7.1999. For providing Services relatable to agricultural operations is still not income derived from the land. The words “derived from” would mean direct linkage/immediate source of income and not an indirect source of income. - Decided in favour of revenue. Income fall under Section 2(1A)(b)(ii) - agricultural income - nature of income - Held that:- So far as activity carried out at Stage-II is concerned, there is no evidence on record to indicate that taking care of the plants after they have been transplanted on the land owned by the WCL would be an activity ordinarily employed by a cultivator in taking care of the plants to render it to be fit to be taken to the market. On a bare reading of subsection, the burden would be upon the appellant to show that it is a cultivator and similar activities are being carried out by cultivators or receiver on rent in kind and this activity of taking care of plants at Stage-II is to render the produce fit to be taken to the market. Therefore, in the present facts, even if one assumes that the appellant is a cultivator, yet, in absence of any evidence on record that the activity carried out by it at Stage-II is ordinarily carried out by a cultivator to render the produce fit to be taken to the market. Therefore, the income cannot fall under Section 2(1A)(b)(ii) of the Act. We note that for Section 2(1A)(b)(iii) of the Act to apply the income should be derived from land by the sale of agricultural produce. In this case, admittedly, the appellant/asseessee has not sold any agricultural produce even if one assumes agricultural produce has derived from the the land of WCL at stage II. The consideration received cannot be classified as agricultural income under 2(i)(a)(iii) of the Act. The income received by the appellant is for rendering of Service and not for carrying out of operations as listed in Section 2(1A)(b)(ii) or (iii) of the Act.- Decided in favour of revenue.
|