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2020 (12) TMI 825 - AT - Income TaxCorrect head on income - Income from trees - addition as income from other sources - Assessee prays that such an addition be deleted as the same being Agricultural income or a capital receipt - HELD THAT:- Certain trees lying on assessee’s land were cut since the same were obstructing the hire tension wires of the Electricity Company. Assessee was compensated during the year. We observe that the assessee was engaged in the business of manufacturing and trading of essential oil, plantations & extraction of essential oils. The trees so cut by the assessee would form part of its trading operations since the assessee would be earning revenue by utilizing these trees. Had the trees not been cut, the assessee would have earned more revenue from the trees. Any compensation received in lieu of loss thereof would form part of assessee’s trading operations. The same is evident from the fact that cut trees sold by the assessee constituted its trading income and the same were accepted to be agricultural income. Similar treatment was to be given to the compensation received for loss of trees. It would akin to a situation where the assessee lost its trading stock and received compensation for loss of the stock. The same would certainly be trading income for the assessee. Since, the income was earned from trees; the same would constitute agricultural income in the hands of the assessee.
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