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2017 (8) TMI 445

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..... order of Commissioner of Income Tax (A) I, Pune dt.30.05.2014 for the assessment year 2010-11. 2. The relevant facts as culled out from the material on record are as under :- 2.1 Assessee is a company stated to be engaged in the business of plant floriculture / tissue culture. Assessee electronically filed its return of income for A.Y. 2010-11 on 01.10.2010 declaring total income at ₹ 3,53,273/-. The case was selected for scrutiny and thereafter the assessment was framed u/s 143(3) of the Act vide order dt.27.02.2013 and the total income was determined at ₹ 10,14,79,040/-. Aggrieved by the order of AO, assessee carried the matter before Ld. CIT(A), who vide order dt.30.05.2014 (in appeal No.PN/CIT(A)-I/ITO Wd.11(3)/Pn/47/2013-14) granted substantial relief to assessee. Aggrieved by the order of Ld. CIT(A), Revenue is now in appeal before us and has raised the following grounds : 1. The Ld. Commissioner of Income Tax (Appeals) grossly erred in directing the Assessing Officer to treat the assessee s income as agricultural income u/s 2(1A)(b)(i) of the Income Tax Act, 1961 and to exclude the said income u/s 10(1) of the Income Tax Act,1961. 2. The Ld. Commis .....

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..... /PN/2012 dated 24/12/2013 by relying on the decision of the Tribunal for the A.Y.2004-05. Since nothing has been brought on record to show that the factual situation for the assessment year under appeal differs from that existed in the A.Y. 2004-05 and A.Y.2009- 10, I am constrained to follow the decision of the ITAT on the issue. Accordingly, respectfully following the decision of the ITAT, Pune in appellant s own case for the A.Y.2004-05 and A.Y.2009-10, the Assessing Officer is directed to treat the income derived from floriculture and tissue culture as agricultural income and exclude the said income from total income under section 10(1) of the Act, for the assessment year under appeal. Ground No. 1 and 2 of appeal are allowed. Aggrieved by the order of Ld. CIT(A), Revenue is now in appeal before us. 5. Before us, Ld.D.R. supported the order of AO. Ld.A.R. on the other hand, reiterated the submissions made before AO and Ld. CIT(A) and further submitted that AO while deciding the issue against assessee AO had mainly followed the reasoning of the AO for A.Y. 2004-05. He submitted that when the matter for A.Y. 2004-05 was carried before Tribunal, the Hon ble Tribunal decided .....

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..... urt in the case of Jugal Kishore Arora Vs. DCIT, 269 ITR 133 (Allhad.). The relevant para Nos. 33 to 40 of the decision of the Tribunal in the case of the assessee for A.Y. 2004-05 (supra) are being reproduced hereunder for a ready reference : 33. In our considered view, therefore, the operations carried out on the facts of the case before us are agricultural operations in nature. The objections taken by the authorities below are devoid of any legally sustainable merits/. Applying the ratio of the Hon ble Supreme Court s judgment in the case of Raja Benoy Kumar Sahas Roy (supra), the income from these operations has to be treated as agricultural income. 34. We would also like to deal with Hon ble Madras High Court s judgment in the case of CIT Vs. Soundarya Nursery (supra) at this stage. As far as the facts of the case were concerned, Their Lordships, inter alia, noted as follows: The Tribunal, after considering all the relevant facts, as also the applicable law, concluded that the assessee s activities are to prepare seedlings on scientific lines: that the other plants are grown on prepared beds on lands owned by it and the plants are then grafted or budded ; that the res .....

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..... matter how sophisticated, if that be used against the assessee, are only to foster the growth and to protect the produce, we find that the income from these operations can only be said to be agricultural income. Their Lordships were also dealing with a situation in which operations were carried on in a greenhouse. Therefore, merely because a greenhouse in involved, the nature of operations would not change. Learned CIT(A) has distinguished this precedent on the ground that in assessee s case, basic operations have not been carried out on land. That premises itself, for the detailed reasons set out earlier in this order, rests on a unsustainable legal foundation. The basic operations have been, and can only be, carried out on the land. The fact that this land is in a greenhouse does not change the character of operations. The distinction was thus wrongly made out by the CIT(A), in our considered view, the principles laid down by the Hon ble Madras High Court s judgment in the case of Soundaraya Nursery (supra) apply to the facts of the case before us as well. 38. We may also refer to Hon ble Allahabad High Court judgment in the case of Jugal Kishore Arora Vs DCIT (269 ITR 133). I .....

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..... e said income as agricultural income under section 2 (1A)(b)(i) of the Act. As a corollary to this direction, the Assessing Officer shall also exclude the said income from the total income under section 10(1) of the Act. The assessee gets the relief accordingly. Since the issue raised is fully covered by the decision of Pune Bench of the Tribunal in the case of assessee itself for the A.Y. 2004- 2005, under similar set of facts, we do not find infirmity in the first appellate order on the issue in favour of the assessee based on the said order of the Tribunal under similar facts during the assessment year under consideration. The same is upheld. The grounds involving the issue are thus rejected. 4. As the issue is identical in this year, we find no reason to take different view. We, therefore, following the orders of the Tribunal in assessee s own case referred (Supra), confirm the order of the Ld. CIT(A) and dismiss all the grounds taken by the Revenue. 5. We, therefore, following the decisions of this Tribunal in assessee s own case, confirm the order of the Ld. CIT(A) on this issue. 6. In the result, the Revenue s appeal is dismissed. Pronounced in the open Court on 2 .....

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