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2019 (10) TMI 1117 - ITAT AHMEDABADExemption on agricultural income - firm is not the owner of such agricultural land but the partners - HELD THAT:- It appears from the partnership deed which is available on record that the said partnership firm has decided to carry on business on selling of agricultural produces from 01.04.2013 by doing agriculture work in the partnership by the name “Shraddha Farm” at Ahmedabad. Needless to mention such partnership deed has been executed amongst three partners namely Patel Mukundbhai Rambhai, Patel Ushaben Mukundbhai and Patel Bhargav Mukundbhai. The detail of the agricultural land is also mentioned in the said partnership deed at clause – 1. We have further considered Section 2(1A) which defines agricultural income which is derived from the agricultural land situated in India used for agricultural purposes. This section does not specify that Revenue has to be derived by the owner of the agricultural land only. The term ‘revenue’, therefore, implies some yield or some income from agricultural operations. Further that it can be inferred that agricultural income can also be derived by person who is a cultivator or who is the owner of land. It is only the receiver of rent-in-kind who can directly be held to be the owner of land as referred to in this section. Further that a cultivator may be the owner but it is not necessary that he has to be the owner. In terms of Clause (a) there can be a recipient of rent from land which implies ownership and also a recipient of revenue derived from land, which implies that the person can be the owner or may not be the owner of land. Sub Clause (1) of Clause (b) speaks of income derived from an agricultural land by agricultural activity. Thus revenue derived from land or from agriculture implies a periodic return of income from agricultural operations only It can be well appreciated that the assessee firm though not being the owner of the agricultural land in question is entitled to get exemption of the agricultural income derived from the said land owned by the partners of the firm. The issue is thus decided in the affirmative i.e. in favour of the assessee and against the Revenue.
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