TMI Blog2010 (6) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... mean that the operations carried out by the assessee-company are not agricultural operations. As a matter of fact, it is to be seen that the assessee-company has carried out basic as well as secondary agricultural operations. Therefore, without any fear of contradiction, it is possible for us to hold that such entire income of the assessee is agricultural in nature which is to be excluded from the nature of total income. The assessee is successful in its appeal. Exemption of income - HELD THAT:- The reasons pointed out by the assessing authority to deny the claim of exemption made by the assessee-company are that the assessee is following international technology, marketing expertise, integrated scientific and commercial activity, etc. These are all matters strange to the strict code of income-tax. Those premises do not have any role in deciding the nature of income within the framework of the Income-tax Act, 1961. The reasons pointed out by the AO are by and large issues to be decided by the policy makers in the Government. In result, appeal filed by the assessee is allowed. - Order The order of the Bench was delivered by Dr. O. K. Narayanan (Vice-President).-This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld lands. In the computation of total income, the assessee claimed deduction of Rs. 1,88,38,838 under rule 7 of the Income-tax Rules, 1962. The deduction has been claimed by the assessee on the ground that the income is partially agricultural and partially from business. But in the note enclosed to the computation of income, the assessee has further stated that the company reserves the right to contend at the time of hearing that the entire income of the company is fully exempt since it is agricultural income as per the Income-tax Act. The Assessing Officer relying on the decision of the Income-tax Appellate Tribunal, Delhi in the case of Proagro Seeds Co. Ltd., v. Joint CIT in I.T. A. No. 90/Del/2000, dated November 11, 2002, noticed the assessee on why the claim for partial deduction should not be denied. The assessee replied that the entire income was in the nature of agricultural income and relied on the judgment of the hon'ble Supreme Court rendered in the case of CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 and other cases. But anyhow the Assessing Officer did not accept any of the contention of the assessee and treated the entire income as business income mainly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him fit to be taken to market ; or (iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in paragraph (ii) of this sub-clause ; (c) any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator or the receiver of rent-in-kind, of any land with respect to which, or the produce of which, any process mentioned in paragraphs (ii) and (iii) of sub-clause (b) is carried on : Provided that (i) the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator, or the receiver of rent-in-kind, by reason of his connection with the land, requires as a dwelling house, or as a store-house, or other out-building, and (ii) the land is either assessed to land revenue in India or is subject to a local rate assessed and collected by officers of the Government as such or where the land is not so assessed to land revenue or subject to a local rate, it is not situated-' It may be appreciated that agri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taka Land Reforms Act would no more hold good in so far as the Government of Karnataka has granted certificate to the assessee for production and distribution of the specified hybrid seeds and plants. Here it may also be appreciated that the nexus between the income claimed by the assessee as not includible in the total income and the agricultural operations conducted by the assessee and the lands from which the income as so generated have not been disputed by the Revenue. The immediate source of the income is the agricultural operations conducted by the assessee on the land and land alone and consequently the same is liable to be treated only as agricultural income." Finally the Tribunal in the said order has concluded as follows : "In view of such discussion, foundation seeds or hybrid seeds produced in own land or lands taken on lease, i.e., on contract farming will be the result of agricultural operations and the profit arising out of such activities shall be treated as agricultural income." Therefore, it is to be seen that the issue raised in the present appeal is squarely covered by the abovementioned decision of the Bangalore "B" Bench in the cases of Indo American Expor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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