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2019 (6) TMI 1044 - ITAT DELHIExemption u/s 10(26AAB) - AO held that marketing of fish, poultry and eggs should not be termed as marketing of agricultural products and that it was rather a trading venture of certain non agricultural goods - HELD THAT:- The main function of the marketing committee is to facilitate free and fair trade of the agricultural produce and not to undertake trading on this own behalf. It has to provide a place where the producer and the consumers can meet and trade freely. The committee is entitled to a fee for the service rendered. It is recovered from the commission agents who undertake the trading on behalf of the purchaser and the seller. The assessee has been appointed u/s 35 of the DAPM Act to facilitate trading in fish poultry, eggs etc. The composition of committee is approved by the Lt. Governor of Delhi & has been notified in the Delhi Gazette, NCTD No. 200 dated 31.08.2001. The word ‘agricultural produce’ has not been defined under the Income Tax Act. The AO held that since fish, poultry and eggs did not constitute agricultural commodity it could not fall under the term of agricultural produce. However, at this juncture, it is important to note the context in which the term agricultural produce has been used. It has been used in the context of the activities of APMC (from which it derives income) constituted under the DAPM for the purpose of regulating and marketing. It is therefore, incumbent to see the relevant Act which empowers the committee to undertaken the regulating and marketing of commodities. In view of the expanded meaning given to the term ‘agricultural produce’ by the DAPM Act, it is our considered opinion that the word ‘agricultural produce’, used in connection with APMC connotes a very wide meaning bringing within its preview a large gamut of commodities besides agricultural products. Since the income accrues to the APMCs from pursuing these activities, the Income Tax Act, also perceives a wider meaning by referring to the DAPM. If the term ‘agricultural produce’ is given a wider meaning in terms of the definition of ‘agriculture produce’ as defined in section 2 (a) of the DAPM Act and as specified in the Schedule of the said Act, fish, poultry and eggs would also be covered under the definition of ‘agriculture produce’ as they have been specified in the Schedule to the DAPM Act. On reaching such conclusion, the benefit of exemption u/s 10(26AAB) will automatically follow. CIT (A) has also reached a similar conclusion by importing the definition of ‘agriculture produce’ from the DAPM Act and we find his reasoning and logic to be perfectly in order. Therefore, we find no reason to differ with the findings of the CIT (A). - Decided against revenue.
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