2022 (11) TMI 843 - AT - Income Tax
Nature of receipt - Agriculture income or not - treating the receipt from National Highways Authority of India (NHAI) on account of sale of tea bushes and receipt received on account of sale of trees as business income of the assessee - HELD THAT:- We agree with the submission of assessee that since the land, in question, has already been treated as agricultural land, therefore, the produce thereupon i.e. the tea bushes and even the shade trees grown for the protection of the tea bushes would also fall in the definition of income from sale of agricultural produce which is exempt u/s 10 - Our above view is fortified by the decision of CIT vs. Kanan Devan Hills Produce Company Ltd.[1990 (1) TMI 5 - CALCUTTA HIGH COURT]
Admittedly, in this case in hand, the land has already been treated as agricultural land not capital in nature and the tea bushes have been cultivated by the assessee to obtain tea leaves and the shade trees are grown by the assessee for the protection of its tea crops.
Not only the tea leaves but the entire plant i.e. tea bushes is the agricultural produce and the shade trees has also been grown and cultivated by the assessee which is a part of its activity to grow and protect tea crops. In view of this, the action of the lower authorities in taxing compensation received on account of sale of tea bushes and shade trees cannot be held to be justified. The addition made by the lower authorities by taxing the sale of tea bushes and shade trees is ordered to be deleted - Decided in favour of assessee.