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TMI Blog2010 (3) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... of fruits and others under the head "Capital gains", but should have considered as agricultural income. 2. That the appellant denies its liability to pay interest under section 234B of the Income-tax Act at Rs. 20,038." 2. The brief facts are that in the present case, the assessee is a chartered accountant by profession and in the present year, the assessee has sold land in the present year and has claimed Rs. 14.92 lakhs as expenses from the sale consideration and also claimed Rs. 10 lakhs as exempt agricultural income although this amount is a part of sale deed as per which the land was sold. The Assessing Officer confronted the assessee regarding his claim that Rs. 10 lakhs is exempt income. In reply, it was submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he paper book as per which it is claimed that the vendee has paid the vendor a sum of Rs. 10 lakhs for trees, etc., which is included in total sale value and this estimation of Rs. 10 lakhs is towards reimbursement of sale proceeds of trees, plants and other existing crops and horticulture. It is submitted by the learned authorised representative for the assessee that since separate amount was paid by the vendee to the assessee on account of trees, plants and horticulture, the same is agricultural income. In reply to a query from the bench, it was submitted by the learned authorised representative for the assessee that trees and plants were existing at the time of purchase of this land by the deceased father of the assessee. Reliance was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case. Reliance was also placed by him on the following judgments : (a) Kailas Rubber & Co. Ltd.'s case (supra). (b) CIT v. M.P. Audyogik Kendra Vikas Nigam (Raipur) Ltd. [1997] 227 ITR 799/[1998] 96 Taxman 204 (MP). 5. We have considered the rival submissions and perused the material available on record and have gone through the orders of the authorities below. We find that in the present case, the land in question was purchased by the deceased father of the assessee Shri D.C. Jain in the year 1981. It was admitted by the learned authorised representative for the assessee in reply to a specific query from the Bench that these trees were existing even at the time of purchase of land by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the Revenue. Another judgment followed by the Commissioner of Income-tax (Appeals) is the judgment of the hon'ble Apex Court, rendered in the case of Kailas Rubber & Co. Ltd.'s case (supra). In that case, the assessee purchased a rubber estate with the rubber trees planted thereon. After the rubber trees ceased to yield any further and became useless, they were cut and sold by the assessee and it was held that such sale proceeds were capital receipts and not taxable as agricultural income-tax under the Kerala Agricultural Income-tax, 1950. This judgment although indirectly supports the Revenue, but it is not directly relevant to the present case because this judgment is in the context of the Kerala Agricultural Income-tax, 1950 and n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... butable to land is assessable as long-term capital gains and the remaining capital gains only can be assessed as short-term capital gains which is pertaining to the superstructure. This judgment is also of no help to the assessee in the present case. The third judgment cited by him is of the hon'ble Calcutta High Court rendered in the case of Suman Tea & Plywood Industries (P.) Ltd.'s case (supra). In this case, the issue in dispute was regarding this aspect as to whether tea bushes can be considered a part of agricultural land and on page 48 of the judgment. It is observed by the hon'ble Calcutta High Court that the principle that what is attached to the land belongs to the land is not applicable to India and trees which stand on agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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