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Asst. Commissioner of Income Tax, Circle-16 (2) , Hyderabad Versus M/s. Prabhat Agri Biotech Ltd.

2015 (9) TMI 640 - ITAT HYDERABAD

Exemption u/s 10(1) - Disallowance of agriculture income - AO disallowed the amount on the reason that this is not agriculture income but income from business operations - Held that:- No reason to interfere with the order of the Ld.CIT(A). Not only that, the issue in earlier years was already crystalised in favour of assessee by the decision of the Hon'ble High Court of Judicature of Andhra Pradesh at Hyderabad in assessee's own case in [2014 (2) TMI 1197 - ANDHRA PRADESH HIGH COURT]. Hon'ble Hi .....

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stated, assessee is a company engaged in the business of seed production, research, marketing of field and vegetable crops, wind power generation. For the year under consideration, it admitted income of ₹ 1,62,03,160/- and claimed deduction u/s. 80IA(2) of the Income Tax Act [Act] of ₹ 25,02,985/-. It declared an agriculture income of ₹ 37,54,466/- from the production of basic seeds and claimed exemption u/s. 10(1) of the Act. Assessing Officer (AO) disallowed the amount of &# .....

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06- 07 vide ITA No.349/AC 16(2)/CIT(A)-V/2007-08 dated 17-9-2010 and also for A.Y.2007-08. For the detailed reasons mentioned in the order for A.Y.2006-07 dated 17-9-2010, relying on the orders of the ITAT, Hyderabad, vide ITA No.94/Hyd/08 dated 8-8-2008 for the A.Y.2004-05 and ITA No.17171Hyd/2008 dated 9-11-2009 for the A.Y.2005-06, where the Tribunal have held the income from seed production as agricultural income and eligible for exemption u/s 10(1) of the Act, my predecessor has directed th .....

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filed further appeals before the High Court of A.P. 4.5 During the appeal proceedings, the appellant also filed the order of the Hon'ble ITAT fur the A.Ys 2008-08 and A.Y.2009-10, in the case of the appellant vide ITA Nos.1288 & 1289/Hyd/12 dated 4-1-2013, where the appellant's claim was allowed. The important portions of the order are reproduced as under: "4. The learned AR submitted before us that right from the assessment year 2003-04 itself the same dispute with regard to th .....

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ars 2004-05 and 2007-08 have decided the issue in favour of the assessee by holding that the income generated on cultivation of basic/foundation seeds is agricultural income and as such is exempt u/s 10(1) of the Act. The learned AR submitted before us copies of the orders passed by the Income-tax Appellate Tribunal as aforesaid. We have heard the rival submissions and perused the material on record. Admittedly, the only dispute in the present appeals is with regard to assessee's claim of ex .....

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agricultural income. In its latest order in ITA No. 1214 and 1215/Hyd/2010 dated 13-4-2012, the Tribunal held in the following manner:- "We have considered the rival submissions and perused the orders of the Revenue authorities. The issue before us is with regard to eligibility of assessee for exemption u/s S.10 (1) in respect of the value of foundation/basic seeds produced by the assessee. We find that the decision of the Tribunal in the case of Swagath Seeds (P) Ltd. relied upon by the l .....

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which are purchased from other farmers, the assessee is not claiming any exemption u/s 10(1) of the IT Act. The assessee is admittedly claiming exemption u/s 10(1) in respect of basic foundation seeds which were generated by performing agricultural operation by the land by the assessee. This Tribunal in the assessee's own case for assessment year 2001-02 considered this issue and found that the assessee is entitled for exemption u/s 10(1) with regard to the basic seeds which were generated o .....

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er of the Tribunal, we hold that the assessee is entitled to exemption u/s 10(1) of the Act and that income generated on cultivation of basic / foundation seeds has to be treated as agricultural income. We order accordingly". Facts involved in the impugned assessment year being identical we respectfully follow the aforesaid decisions of the Tribunal and hold that the income generated from sale of basic seeds being agricultural income is exempt u/s 10(1) of the Act. Accordingly, we dismiss t .....

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