TMI Blog2017 (8) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. There are number of grounds raised by the Revenue as evident from the grounds of appeal. However, as narrated by the Ld. Counsels, the issue that arises from the said grounds relate to the agricultural nature of the income earned out of the sale of the flowering plants developed out of imported mother plants in Tissue Culture Laboratory. Assessee claims that the said income earned thereof constitutes an exempt income u/s.10(1) of the Act. 3. Briefly stated relevant facts are that the assessee is engaged in the business of plant floriculture and tissue culture. He filed the return of income declaring total income of ₹ 69.13 lakhs (rounded off). In the assessment, AO disallowed claim of exemption u/s.10(1) amounting to ₹ 7.35 crores (rounded off). He also made disallowance on account of depreciation on goodwill. The assessed income was determined at ₹ 8,04,49,290/-. In the return, assessee disclosed exempt agricultural income of ₹ 7,34,69,520/- earned on account of tissue culture products. Assessee invoked the provisions of section 10(1) relating to exempt agricultural income. Further, assessee relied on the order of the Tribunal for Assessment Year 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties. We find that this issue has 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 followed in the other years also being A.Ys. 2001-02, 2003-04 and 2005-06 and 2006-07 being ITA Nos. 1274 to 1278/PN/2010, common order dated 22.2.2012. The operative part of the order of the Tribunal in ITA Nos. 1274 to 1278/PN/2010 dated 22nd February 2012 is as under: 7. We find that the Tribunal in the case of assessee for the A.Y. 2004-05 has discussed an identical issue in detail before deciding the same in favour of the assessee. The Tribunal while deciding the issue has taken strength from 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 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are based on land, would be agricultural products. Here, 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 sold by the assessee in pots were the result of the basic operations on the land on expending human skill and labour thereon and it is only after the performance of the basic operations on the land, the resultant product grown 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 comprehended within the term agriculture and they are clearly the products of agriculture. 37. When we apply the above tests to the facts of the present case, and we bear in mind our findings that b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation 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 be prospective in application, but held to be retrospective in effect. On the basis of these elaborate arguments, it was submitted that, in any event, based on this clarificatory amendment in law, basic operations having been carried out on land is no longer sine qua non for treating income as agricultural income. This plea was clearly an alternative plea. Since we have allowed the basic plea of the assessee and we have held that the basic operations were carried out on land, it is not really necessary to deal with this alternative plea which is only academic in the present content. We leave it at that. 40. In view of the above discussions, and for the reasons set out above, we are of the considered view that the authorities belong indeed erred in law and on facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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