TMI Blog2018 (11) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... ough was aware of Rule 7 as stood under the rules from its inception, took proceedings for assessment under the Income Tax Act only in the year 2004. Hence, the Division Bench directed all agricultural income assessments completed from assessment year 2005-06 to stand set aside with a direction to the State Taxing Authority to modify the assessments in line with the assessments completed by the 1st respondent under the Central Income Tax. It was also directed that the agricultural income tax assessed for the assessment year 2004-05 and prior years would be treated as confirmed. The Income Tax Authorities were directed not to assess the income under Rule 7 of the Rules for the said years. For assessment years are 2005-06 and 2006-07 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chandran, J. The issue raised in the appeal is academic by reason of the judgment of a Division Bench in W.P.(C) No.36862/2004. The assessment years in I.T.As. Nos.932/2009, 988/2009, 1134/2009, 384/2010 401/2010 are 1999-2000, 1997-98, 1998-99, 2004-05 and 2002-03 respectively, all prior to assessment year 2004-05. The issue raised before the Tribunal was whether Rule 7 of the Income Tax Rules, 1962 could be applied in the case of the assessee. The assessee is a public limited company engaged in the cultivation of oil palms and production and sale of crude palm oil. The palm oil is also produced by the assessee from the palm fruit obtained from its plantations as also from local purchase. The assessee was offering the entire inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act is perfectly in order. The Division Bench referred to sub-rule (2) of Rule 7 and held that the market value of the agricultural produce, which in this case is the fruit grown in the assessee's plantations, with the pulp and kernel therein; has to be excluded and business income has to be computed only for the value addition made by way of the industrial process of extraction of crude palm oil. The question with respect to whether double taxation could be permitted or not was left to be considered in the Writ Petition. 4. The Writ Petition was considered and decision rendered on 31.01.2012 in Oil Palm India Ltd. v. Assistant Commissioner of Income Tax , ( WP(C) No.36862/2004 ). Therein, the Division Bench noticed the intr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are prior to 2005-06 and hence the appeals will stand rejected. 5. In I.T.A.Nos.400/2010 and 11/2011, the assessment years are 2005-06 and 2006-07. There the assessments under Rule 7 of the Income Tax Rules would have to be sustained. In fact, the assessments were sustained by both the First Appellate Authority and the Tribunal. The appeal is on the question of the direction of the First Appellate Authority to determine the income based on a formula, which the Senior Counsel for Government of India (Taxes) would submit is not a statutory formula. We find force in the contention raised by the Revenue. Since the formula evolved by the First Appellate Authority is not a statutory one, it is only appropriate that the Assessing Officer consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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