TMI Blog2020 (9) TMI 954X X X X Extracts X X X X X X X X Extracts X X X X ..... ation, the land cannot be said to have been used for agricultural purposes. It is essential that basic primary operation, prior to germination of the produce, involving expenditure of human skill and labour on the land and subsequent post-germination operations such as weeding, digging of the soil around the growth, etc., should be performed in order to constitute agricultural activity. In the case of assessee, the company which had obtained the land on lease from the assessee has apparently not indulged in any such activities. - Decided against assessee. - ITA No.2081/H/2018, ITA No.2082/H/2018 - - - Dated:- 8-7-2020 - Shri A. Mohan Alankamony, Accountant Member For the Assessee : Smt. S. Sandhya For the Revenue : Sri Sunil K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition under the head Income from other source to ₹ 24,00,000/- in each of the assessees case based on the decisions of various higher Judiciaries and partly agreeing with the finding of the Ld.AO. Aggrieved by the orders of the Ld. CIT (A), both the assessees are now on appeal before the Tribunal. 4. During the course of assessment proceedings, it was revealed that both the assessees had claimed agricultural income of ₹ 24 lakhs each. On query it was explained that each of the assessee own 20 Acres of agricultural land in Tanguturu village of Nalgonda District and the same was given on lease to M/s. Biotech Laboratories India Limited on a yearly lease rent of ₹ 24,000/- per acre in the year 2009. It was further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural income. Accordingly, the Ld. AO allowed the amount of ₹ 4,80,000 [20 X 24,000] as agricultural income in the case of each of the assessees for the relevant AY and treated the balance amount of ₹ 19,20,000/- as income from other source in their hands and brought the same to tax. 5. On appeal, the Ld. CIT (A) was of the view that the entire amount of ₹ 24 lakhs received by each of the assessees from M/s. Sri Biotech Laboratories India Limited in the form of lease rent during the relevant assessment year shall not fall under the definition of agricultural income as envisaged under the provisions of Section 2(1A) of the Act because of the following reasons:- 1. Para 9 of the lease agreement stipulates that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. With the above observation, the Ld. CIT (A) concluded that the amount received by both the assessee from the company in the form of lease rent will not fall under the definition of agricultural income as envisaged U/s. 2(1A) of the Act. Accordingly, the Ld. CIT (A) held that both the assessee are not eligible to claim exemption U/s. 10(1) of the Act., and therefore dismissed the appeal of the assessees. Further the benefit granted by the Ld. AO for treating the amount of ₹ 4,80,000/- as agricultural income out of the total lease rent received of ₹ 24,00,000/- during the relevant assessment year was withdrawn in the case of both the assessees by the Ld. CIT (A). 7. Before us, the Ld. AR vehemently argue by stating that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural operation on the land. Section 2(1A) (a) of the Act stipulates that agricultural income means rent or revenue derived from land which is situated in India and is used for agricultural purposes . From the provisions of the Act, it is crystal clear that the land from which rent is received should be used for agricultural purposes. In the case of assessee, it is evident that the land was either used for research and development or kept vacant but not used for agricultural purposes. The Honourable apex court in the case CAT vs. Raja Benoy Kumar Sahas Roy [1957] reported in 32 ITR 466 (SC) has held that unless there is some measure of cultivation of land and some skilled labour is performed on the land for cultivation, the land cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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