TMI Blog2022 (5) TMI 1334X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be supplied to the farmer on credit basis. Before us, the assessee has not filed any agreement, showing the lands being leased in favour of the assessee. It is submitted that these were the documents filed by the assessee in reply to the query raised by the Ld.AO at the time of original assessment proceedings. Even there are no agreements placed before us that reveals ownership in land by the assessee, on which farming was carried out. From the materials placed before the Ld.AO it is prima facie inferred that the no details are filed by the assessee and the Ld.AO has not verified the exemption claimed by the assessee under section 10(1) of the Act. Thus, in our view, the original assessment is completed without proper enquiries, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the A.O. during the course of assessment. 2. The Pr. CIT was not correct in not appreciating the facts that the A.O. has verified the Agricultural income claimed as exempt and allowed the same as exemption from ta, based on the Appellant company's activities, during u/s.143(3) proceedings by calling detailed information in this regard. 3. The Pr. CIT was not correct in directing AO to revise the assessment by invoking the provisions of section 263 relying on the decision of Hon'ble High court in the case of Namdhari Seeds Pvt Ltd without appreciating the facts that the Appellants company activities falls under Agricultural activities and the same is exempt u/s.10(1A) of the Act. 4. The Appellant craves leave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al activities carried on by the assessee and whether such activities were eligible for claim under section 10(1) of the Act. The Ld.Pr.CIT, accordingly issued notice under section 263 of the Act, on 18/03/2021, reproduced as under: ...On examination of records, it was noticed that the assessee had claimed exemption on agricultural income u/s.10(1) of IT Act amounting to Rs.4,65,63,312/- and the sum has been allowed in the order passed u/s.143(3) of the act. The company is into the R D of germ plasm, production of foundation seeds from germ plasm, processing and marketing of commercial seeds in India and abroad. As seen from the records, the Assessee enters into agreement with farmers for production of seeds. Actual agricultural operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 263 of the Act by Ld.Pr.CIT. 4. The Ld.AR submitted that, the activity carried on by the assessee falls under agricultural operation and is eligible for claim under section 10 (1) of the Act. He submitted that, before the Ld.AO, during the course of assessment proceedings, under section 143(3) of the Act, the assessee filed various details/documents in respect of the claim. Referring to the show cause notice issued by the Ld.AO during the original assessment proceedings dated 10/11/2018, the Ld.AR submitted that, the assessing officer had raised a specific query in respect of the exempt income and the letter filed by assessee dated 14/12/2018 furnishing all the relevant details in respect of the claim. He submitted that, al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in the leased lands, but it is also producing in its own land, and hence the observation of the Ld.Pr.CIT that, the assessee is not directly involved in cultivating the land is incorrect. 8. The Ld.AR contended that, production of basic seeds as well as hybrid seeds were part of basic agricultural operations carried out by the assessee on its own land as well as on leasehold land and that contract farming did not take away the character of basic operations carried out by the assessee, which were agricultural in nature. 8.1 It is the submitted that, claim of the assessee cannot be denied and that the Ld.AO, while passing the assessment order in the original proceedings verified all these details. He thus vehemently opposed the revis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein specific query relating to agricultural income of Rs.4,65,63,312/- claimed by assessee as exemption was asked/called upon by the Ld.AO for justification. The assessee in response filed following details: 11. We note that the in paper book filed before us, the assessee has filed copies of above details. The agreement entered into by the assessee with the farmer, is the agreement for raising seed plantations. It is submitted that, all these agreements were filed before the Ld.AO in reply to the query raised, during the original assessment proceedings, in respect of the claim made by the assessee. A sample agreement with a farmer is placed at page 13 -16 of the paper book. We have perused the agreement with the farmer relied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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