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Income Tax Officer, Ward-11 (3) , Pune Versus KF Bioplants Pvt. Limited

2013 (12) TMI 1633 - ITAT PUNE

ITA No. 2217/PN/2012 - Dated:- 24-12-2013 - SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER Appellant By: Shri S.P. Walimbe Respondent By: Shri Rajendra Agiwal ORDER PER R.S. PADVEKAR, JM:- In this appeal, the Revenue has challenged the impugned order of the Ld. CIT(A)-I, Pune dated 15-06-2012 for the A.Y. 2009-10. The Revenue has taken the multiple grounds but Ground No. 2 is the effective ground which reads as under: The learned Commissioner of Income-tax (Appeals) g .....

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aimed the exemption u/s. 10(1) of the Income-tax Act. 3. So far as A.Y. 2009-10 is concerned, the assessee declared the income derived from the said activities to the extent of ₹ 5,75,67,448/- as agricultural income and claimed the exemption u/s. 10(1) of the I.T. Act. This issue has already been decided in the assessee s own case. In the A.Y. 2004-05 by the ITAT, Pune holding that the income derived from floriculture / tissue culture and horticulture is an agricultural income. The Assessi .....

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s already been decided in favour of the assessee by the ITAT, B Bench, Pune being ITA No. 146/PN/2008 order dated 26-03-2009. The said decision has been followed by the Tribunal in assessee s own case for the A.Y. 2007-08 in ITA No. 1110/PN/2011 order dated 25-09-2012. The operative part of the said decision on this issue is as under: 3. We find that the Tribunal has allowed the identical claim of the assessee on the identical set of facts in the A.Y. 2004-05. The said order of the Tribunal is f .....

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m several decisions including decision of Hon ble Supreme Court in the case of CIT Vs. Raja Benoy Kumar Sahas Roy (Supra), Hon ble Madrash High Court in the case of CIT Vs. Soundarya Nursery, 241 ITR 530(Mad.) and of Hon ble Allahabad High Court 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 con .....

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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 resulting grafts are transplanted in suitable containers and are reare .....

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t, which is reared on earth and for which certainly contribution of human labour and energy was essential . These observations equally apply to assessee s case as well. 36. In Soundarya Nursery s case, Hon ble Madras High Court, after taking note of the law laid down by the Hon ble Supreme Court in the case of Raja Benoy Kumar Sahas Roy (supra) and the facts of the case, observed as follows: All the products of the land, which have some utility either for consumption or for trade or commerce, if .....

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or such part thereof as was suitable for being nurtured in a pot, was separated and placed in a pot and nurtured with water and by placing them in the green house or in shade and after performing several operations, such as weeding, watering, manuring, etc., they are made ready for sale as plants all these questions would be agricultural operations all this involves human skill and effort. Thus, the plants sold by the assessee in pots were the result of primary as well as subsequent operations c .....

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id 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 o .....

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269 ITR 133). In this case, Their Lordships, after taking note of and analyzing the landmark Supreme Court judgment in the case of Raja Benoy Kumar Sahas Roy (supra), also observed that the nature of produce raised has no relevance to the character that the nature of produce raised has no relevance to the character of agricultural operation . It was noted that cultivation of flowers of artistic and decorative value would also be included in the scope of agricultural operations. This observation .....

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emption under section 10(1) of the Act. Learned counsel has contended that this Explanation is retrospective in effect inasmuch as it is merely clarificatory in nature. We are taken through the budget speech by the Finance Minister, Explanatory Memorandum to the Finance Bill and other documents to support the contention that this amendment in law was merely clarificatory. Our attention was thus invited to several judicial precedents in which it is noted that even while an amendment is stated to .....

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