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TMI Blog2017 (1) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 dated 31.03.2011. Thereafter, notice under section 143(2) dated 23.09.2011 has been served on the assessee. Further notice under Section 142(1) dated 05.02.2013 has also been served on the assessee. In response to the same, the assessee's Authorised Representative appeared and submitted his explanations. The Assessing Officer has determined the taxable income as Rs. 13,72,687/-. 3. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who, vide his order dated 11.08.2015, had partly allowed the appeal by holding that the income derived from the nursery falls within the definition of 'Agricultural income' and hence, the same was exempted under Section 10(1) of the Act. Aggrieved by the same, the Revenue filed an appeal before the Income Tax Appellate Tribunal in I.T.A.No.2108/Mds/2015. The Tribunal vide its order dated 29.01.2016 upheld the order of Commissioner of Income Tax (Appeals), both on facts and in law, in respect of agricultural income and dismissed the appeal. Challenging the same, the Revenue has preferred the present Appeal. 4. Mr.T.Ravikumar, learned senior Standing Counsel for the appellant would submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd circumstances of the case, the Tribunal was right in deleting the disallowance made on agricultural income on the ground that the same was exempted under Section 10(1) of the Income Tax Act? (ii) Is not the finding of the Tribunal bad, especially, when Explanation 3 to Section 2(1A) was inserted by Finance Act, 2008 with effect from 01.04.2009 and was applicable only from the assessment year 2009-10 and not for the earlier assessment years? 8. The respondent/assessee was a landscaping architect and was running two business concerns viz., Plants scape and flower and petals. The respondent filed his return of income for the assessment year 2004-05 declaring taxable income as Rs. 3,20,380/- from plantscape business and agricultural income as Rs. 10,52,307/- from agricultural operation. After completion of the assessment under section 143(3), the assessing officer reopened the same and issued notices under sections 143(2) and 142(1) of the Act to the assessee. 9. As per section 2(1A) of the Income Tax Act, agricultural income should be derived from the land and the said land should have been used for agricultural operation. Then, there should be something done on the land by huma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion, the appellate authority has relied on the decision of CIT v. Green Gold Tree Farmers P Ltd., (2008) 167 Taxman 151 (Uttarakand), wherein it has been held that sale proceeds of plants raised in nursery on land belonging to the assessee constitute agriculture income. The appellate authority has also referred to the decision of a Division Bench of this Hon'ble Court in CIT vs. Soundarya Nursery (2000) (241 ITR 531) dated 5.8.1998, and held that even the plants grown in pots is an agricultural activity as they involve all the activities of agriculture farming like seeding, weeding, watering, manuring etc. At Paragraphs 8 and 9 of the judgment, it has been held as follows:- 8. All the products of the land, which have some utility either for consumption or for trade or commerce, if they are based on land, would be agricultural products. Hence, it is not the case of the revenue that without performing the basic operations, only the subsequent operations, as described in the decision of the Apex Court have been performed by the assessee. If the plants described in the decision of the Apex Court have been performed by the assessee. If the plants sold by the assessee in pots were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Court in CIT vs. Soundarya Nursery (2000) (241 ITR 531) dated 5.8.1998, and thereafter, at Paragraph 7 of the Judgment, this Court held as follows:- "7. Our attention was then invited by learned counsel to the decision of the Supreme Court in the case of CIT V. Raja Benoy Rumor Sahas Roy [(1957) 32 ITR 466], which is the leading case of "agriculture". It was held therein that agriculture in its primary sense denotes the cultivation of the field and is restricted to cultivation of the land in the strict sense of the term, meaning thereby tilling of the land, sowing of the seeds, planting and similar operations on the land and these are basis operations, which require the expenditure human skill and labour upon the land itself. The Apex Court further held that besides the basic operations, the subsequent operations would also be comprehended within the terms of agriculture, and such subsequent operations are illustrated as weeding, digging the soil around the growth, removal of undesirable undergrowth and all operations which foster the growth and preservation of the same not only from insects and pets, but also from depredation, from outside, tending, pruning, cutting, harvest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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