9911796707
TMI Blog2012 (7) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 143(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). The case of the assessee was selected for scrutiny and notice under section 143(2) was issued to the assessee on 31.08.2010. During the course of examination by income-tax authorities, the Assessing Officer raised certain objections regarding certain elements in agricultural income. The agricultural income of the assessee included income from poultry, dairy farming, cultivation of crops and coconut trees. The elements of agricultural income as claimed by the assessee include:- Poultry farming- Net income from sale of Emu birds : Rs. 5,38,510 Dairy farming - Net income from Sale of milk & goat : Rs. 3,07,690 Income from coconut trees : Rs. 66,820 Income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iry farming, coconut trees and cultivation & sale of turmeric as agricultural income. The Assessing Officer has disallowed income from all the above sources as agricultural income and treated the income from sale of Emu Birds as income from business. He submitted that the Assessing Officer and CIT(A) have erred in not allowing expenditure incurred by the appellant /assessee towards purchase of birds, feeding expenses of the earlier years etc. The assessee has not claimed expenditure towards feeding and maintenance cost of Emu birds in the earlier years. 5. As regards the income from sale of coconuts, the A.R. submitted that there were about 275 coconut trees out of which 200 coconut trees were seedling and non-yield producing stage. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Emu birds, income from sale of coconuts and sale of turmeric as agricultural income. He submitted that in respect of sale of turmeric no bills were produced and only some writings on letterheads from the market were produced before the Assessing Officer. Even the dates of such letters did not coincide with the harvesting season of turmeric crop. As regards other disallowances, the DR relied upon the orders passed by the lower authorities. 7. We have heard the submissions made by the parties and have gone through the orders passed by the authorities below. With regard to the first issue i.e. expenditure in respect of poultry farming (sale of Emu birds), the assessee has only assailed that the authorities below have not allowed expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed that it is not acceptable that Rs. 2,400/- worth of trees would have yielded an amount of Rs. 66,820/-. The assessee, on the other hand, has categorically stated that he has about 275 coconut trees out of which he has planted 200 coconut trees in the year 2004-05. The coconut trees start yielding fruit in three years time and it was during the relevant assessment year that for the first time, the trees planted by the assessee gave fruits and the assessee was able to earn Rs. 66,820/- from the sale of coconuts. The assessee has alleged to have purchased the land on which coconuts trees were planted in the assessment year 2004-05. This fact has not been rebutted by the D.R. The Assessing Officer has disallowed the entire income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmed the basic operations required for growing coconut trees viz tilling of the land, planting etc. The assessee must have taken good care of the coconut trees for the period of three years before they start yielding fruit. We are, therefore of the considered opinion that growing of coconut trees require basic minimum of skill, labour etc. Therefore, the income earned from coconut trees deserves to be treated as agricultural income. However, as per the documents on record, the assessee has not produced any concrete evidence to show that it has earned income from sale of coconuts. A perusal of records shows that the assessee is a small time farmer. He may not have maintained record of sale of coconuts. However, in view of un-rebutted fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not coincide, the income cannot be considered as agricultural income. The authorities below turned down the stand of the assessee that once the turmeric is harvested after making certain process, it is stored and when the prices are high the same is sold. The counsel appearing for the assessee has categorically stated that the total land under cultivation of coconuts and turmeric is approximately 3.9 acres and the cycle of cultivation and harvesting of turmeric crop is from 6 to 7 months. It seems that the Assessing Officer without taking into consideration the above facts has made the addition of Rs. 2,95,780/- as 'Income from Other Sources' on account of sale of turmeric and the same has been upheld by the CIT(A) in a mechanical manner. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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