TMI Blog2021 (1) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... lusively for the purpose of cultivating on its own rather than sub-leasing it to outside parties. Therefore, no presumption can be drawn about the agricultural operations being or not being carried out by the company. Fact remains that assessee has earned lease rent income by leasing out the agricultural land. Whether such income is eligible to be taken as agricultural income is the question before the Tribunal. The term agricultural income has been defined u/s 2(1A) of the I.T Act and for the purpose of ready reference. From the lease deed, it is seen that the assessee had carried on agricultural operations during the previous year i.e. 2013-14 relevant to the A.Y 2014-15 and thereafter, the assessee has leased out this land to Adisa Agro (P) Ltd on 30.09.2013 i.e. during the previous year 2014-15 relevant to the A.Y 2015-16. Therefore, the assessee had carried on agricultural operations during the previous year 2013-14 and subsequently such agricultural land has been given on lease to a company which is also engaged in carrying on agricultural operations. The finding of the CIT (A) is that the crops grown are commercial in nature. The definition of Agricultural Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural activity Para 7.16 . 6 The appellant craves leave to add, amend, delete or substitute any round or rounds during the course of hearing . 2. Brief facts of the case are that the assessee individual filed his return of income for the A.Y 2015-16 on 1.1.2016 admitting total income of ₹ 3,33,840/- after claiming Chapter VIA deduction of ₹ 1,10,000/-. The assessee also admitted agricultural income of ₹ 29,09,280/- and other income of ₹ 2,01,921/- under Exempt Income category. The assessee s return of income was selected for scrutiny under CASS to examine the assessee s claim of agricultural income. Accordingly, notices u/s 143(2) and 143(1) were issued to the assessee requiring the assessee to furnish certain information. The assessee furnished some information in support of his claim of agricultural income. After perusal of the same, the AO observed that the assessee is having agricultural land of 20 acres and 10 guntas in Survey No.426 and 427 respectively at Kadavergu Village of Warangal District. Apart from this, the assessee has taken on lease 10 acres and 21 guntas of dry land situated at Chellampally Village of Tallakondapally Mand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assessment order) wherein the name of the crop is mentioned as Mango. He further submitted that the lease deed entered into with Adisa Agro (P) Ltd also mentions the agricultural operations having been carried on by the assessee and also the infrastructure created by him for carrying on such activity and there is no dispute with regard to the same. He submitted that the CIT (A) has disallowed the claim of agricultural income by holding that the assessee has utilized the agricultural land for growing commercial crops such as Aromatic and Medicinal plants and therefore, it cannot be treated as agricultural operations. He submitted that this finding of the CIT (A) is contrary to his finding subsequently that the assessee himself has not carried on any agricultural activity. He further submitted that the case laws relied upon by the CIT (A) are all distinguishable on facts and have no relevance to the case on hand. He, therefore, prayed that the claim of agricultural income by the assessee be allowed. 5. The learned DR, on the other hand, supported the orders of the authorities below and submitted that the assessee himself has not carried on any agricultural operations but h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans- (a) any rent or revenue derived from land which is situated in India and is used for agricultural purposes; (b) any income derived from such land by- (i) agriculture; or (ii) the performance by a cultivator or receiver of rent- in- kind of any process ordinarily employed by a cultivator or receiver of rent- in- kind to render the produce raised or received by him fit to be taken to market; or (iii) the sale by a cultivator or receiver of rent- in- kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in paragraph (ii) of this sub- clause; (c) any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator or the receiver of rent- in- kind, of any land with respect to which, or the produce of which, any process mentioned in paragraphs (ii) and (iii) of sub- clause (b) is carried on: 1 Provided that- (i) the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator, or the receiver of rent- in- kin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee with Adisa Agro (P) Ltd is September, 2013 i.e. A.Y 2014-15. From the lease deed, it is seen that the assessee had carried on agricultural operations during the previous year i.e. 2013-14 relevant to the A.Y 2014-15 and thereafter, the assessee has leased out this land to Adisa Agro (P) Ltd on 30.09.2013 i.e. during the previous year 2014-15 relevant to the A.Y 2015-16. Therefore, the assessee had carried on agricultural operations during the previous year 2013- 14 and subsequently such agricultural land has been given on lease to a company which is also engaged in carrying on agricultural operations. The finding of the CIT (A) is that the crops grown are commercial in nature. The definition of Agricultural Income does not limit its application to any particular crops/produce. The only requirement is that the basic agricultural operations are to be carried out. The nature of the crop being commercial in nature will not therefore, disentitle the assessee from claiming the income as agricultural income . Thus, the finding of the CIT (A) that the assessee s intention of taking the agricultural lands on lease is to exploit them commercially is not sustainable to disentitle t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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