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2021 (3) TMI 262 - AT - Income TaxExemption u/s 10(1) - Agricultural Income or not - income derived from sale of saplings and seedling grown in a nursery shall deemed to be agricultural income - A.O. held that the portion relating to other than supply of plants and saplings cannot be characterized as agricultural income and such portion of income cannot be entitled to exemption u/s 10(1) - HELD THAT:- In the instant case, the primary operation is done in assessee’s nursery will confine only with regard to growing of plants and saplings. The subsequent operation, i.e., supply of fertilizer, supply of soil, engaging Horticulturists, insuring the plant, making pits and other related activities even assuming it is secondary operation is never carried out in assessee’s nursery but in client’s site. Plants and saplings are planted in the client’s site and became the property of the client. Thereafter the assessee’s role is only to tend these plants and saplings. The services so performed are in the nature of maintenance and cannot be termed as secondary operation in the strict sense of the term. Therefore, hold that the income derived by the assessee by activities other than sale of plants raised in its own nursery is not in the nature of agricultural income falling within the definition of section 2(1A) of the I.T.Act. The judicial pronouncement relied on by the assessee is distinguishable on facts for the reason that in those case, both primary and secondary agricultural operations as enumerated by the Hon’ble Apex Court in the case of CIT v. Raja Benoy Kumar Sahas Roy[1957 (5) TMI 6 - SUPREME COURT]was carried out in assessee’s land, whereas, in the instant case, only growing of saplings and seedlings is undertaken in assessee’s nursery and the other activities such as preparation of land, supply of soil, supply of fertilizer, engaging Horticulturists, insuring etc. even assuming it as secondary operation to the primary operation was never carried out in assessee’s nursery but in client’s site. - Decided against assessee.
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