TMI Blog2014 (7) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of the agrarian reforms. In case, where the assessee ploughs the land and in case, where the law permits taking agricultural leases of land and if the assessee cultivates the land, raises the crops and seeds and hence, income derived therefrom will fall within the definition of agricultural income and the assessee would be entitled to the benefit of Section 10(1)(a) of the Act. If the assessee is not owning the land and in law, he cannot take the land on lease, but still he enters into contract with the land owners, gives them the monitory assistance and those land owners physically cultivate the land and grow the crops and when the assessee contends that crops grown belongs to him and he is selling them and therefore, it is an agricultural income, the question arises as to whether the exemption under Section 10(1) is attracted to such income? Though, several judgments were cited contending that it is an agricultural income, we do not see in any of those judgments, they have taken note of this agrarian reforms. Most of the judgments are anterior to agrarian reforms. At any rate, the authorities have not applied their minds to these fundamental facts which are in the natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA Nos. 200/2012, 199/2012, 174/2012, 173/2012, 172/2012, 387/2012, 388/2012, 411/2010, 287/2013, 436/2012, 19/2012, 434/2012 - - - Dated:- 18-7-2014 - THE HON BLE MR. JUSTICE N KUMAR AND THE HON BLE MR. JUSTICE B MANOHAR For the Appellant : SRI A. SHANKAR SRI M. LAVA, ADVS. For the Respondent : SRI K.V. ARAVIND, ADVOCATE JUDGMENT In this batch of appeals as a common question of law is involved, they are taken up for consideration together and disposed of by this common order. 2. In I.T.A.Nos. 346/12, 200/12, 199/12, 174/12, 173/12 and 172/12, the assessee is M/s. Namdhari Seeds which is a partnership firm engaged in cultivation and growing of seeds. In I.T.A.Nos.387/12, 388/12, 411/10, 287/13, 436/12 and 19/12, the assessee is M/s. Advanta India Limited, a public limited Company engaged in development and production of basic seeds and hybrid seeds. 3. The Assessee - Namdhari Seeds has filed this appeal against the order passed by the Tribunal holding that the income derived amounts to business income by the assessee and not agricultural income, following the judgment of this Court in their own case in the case of COMMISSIONER OF INCOME TAX AND ANOTHER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 describe din paragraph (ii) of this sub-clause. 7. Section 10 of the Act, which finds place in Chapter III, deals with income which do not form part of total income. It reads as under: Incomes not included in total income 10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included- (1) agricultural income 8. In the light of the aforesaid statutory provision, it is the contention of the assessee that the income derived from the aforesaid operations constitutes agricultural income as defined under the Act and therefore, the same cannot be included in the total income of the assessee in view of Section 10(1) of the Act. In the case of M/s. Namdhari Seeds, the said contention is negatived. In the case of M/s. Advanta India Limited, the said contention is acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belongs to him and he is selling them and therefore, it is an agricultural income, the question arises as to whether the exemption under Section 10(1) is attracted to such income? 14. Though, several judgments were cited contending that it is an agricultural income, we do not see in any of those judgments, they have taken note of this agrarian reforms. Most of the judgments are anterior to agrarian reforms. At any rate, the authorities have not applied their minds to these fundamental facts which are in the nature of jurisdictional facts before valid order is passed under the said Act. In the absence of the authorities applying their minds to these facts, it would be inappropriate for this Court to record any findings on the basis of the submissions made at the Bar or by looking into the documents, now being produced. 15. Therefore, we are of the view that the proper course would be to set-aside all the impugned orders, remit the matters back to the Assessing Authority, so that Assessing Authority would formulate proper points for consideration, give an opportunity to the assessee to produce evidence in support of their contention. The Assessing Authority would look into agr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these points, the Assessing Authority shall take note of the provisions of the Land Reforms Act of that particular State, the judgments relied on by the parties and then in the light of the facts of each case, shall decide the case on merits and in accordance with law, without being in any way influenced by any of the findings recorded either by this Court or by the impugned orders. e) If the Assessing Authority comes to the conclusion that a seed is an agricultural produce, after it undergoes a chemical process and then, the seeds are sold, the portion of it, is to be apportioned to the business income to the extent, the process has taken place and the remaining portion being the agricultural income. In the facts of the cases, keeping in mind the law on point, the Assessing Authority is at liberty to apportion the said income, accordingly. f) If the Assessing Authority were to hold that income is an agricultural income in accordance with law, whatever, benefit to which they are entitled to, should be granted to them, which may in the form of deductions which the assessee is entitled to or in the form of losses. 19. In ITA No.434/2012: The second substantial question of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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