TMI Blog2022 (11) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. Kanan Devan Hills Produce Company Ltd.[ 1990 (1) TMI 5 - CALCUTTA HIGH COURT ] Admittedly, in this case in hand, the land has already been treated as agricultural land not capital in nature and the tea bushes have been cultivated by the assessee to obtain tea leaves and the shade trees are grown by the assessee for the protection of its tea crops. Not only the tea leaves but the entire plant i.e. tea bushes is the agricultural produce and the shade trees has also been grown and cultivated by the assessee which is a part of its activity to grow and protect tea crops. In view of this, the action of the lower authorities in taxing compensation received on account of sale of tea bushes and shade trees cannot be held to be justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f labour quarters, which is duly exempted u/s 10 of the IT Act, 1961. 4 On the facts and circumstances of the case, the Ld. CIT(A) erred in disallowing interest of Rs 19,32,000/- on account of interest payment to the related concern. The interest disallowed is 12% of Rs 1,61,00,000/-which is equal to Rs.19,32,000/-. 5. On the facts and circumstances of the case, the Ld. CIT(A) erred in disallowing interest of Rs 37,53,492/- on account of interest attributable to investments made in Subsidiary Company Doloo Overseas Ltd . The interest disallowed is 12 % of Rs 3,12,79,100/-which is equal to Rs 37,53,492/-. 6 Without prejudice to grounds No. 4 5 of Grounds of Appeal , the Ld. CIT(A) erred in not considering the interest di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has received Rs.3,00,84,778/- from NHAI as compensation against acquisition of agricultural land, which is not a capital asset by virtue of section 2(14) of the Income Tax Act, 1961. Assessee received Rs.75,84,192/- from NHAI against sale of tea bushes. Assessee received Rs.17,47,763/- from NHAI against sale of shade trees. Assessee received Rs.51,36,869/- from NHAI against sale of labour quarters. 5. Though the land of the assessee has been accepted by the Department as agricultural land which was not a capital asset as per section 2(14) of the Act and hence the compensation received by the assessee on acquisition of the land has not been taxed. However, the Assessing Officer treated the amount received from sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en was used for agricultural purposes . In fact, there is no dispute in this case that the activity relating to planting, growing and nurturing of the tea bushes will come within the ambit of the expression agricultural . The planting of trees to protect the tea bushes must be regarded as part of the agricultural activity. The purpose of the planting of the trees was to protect the tea bushes from damage that may be caused by high winds. The planting of the trees in this case was part of the agricultural process of growing the crop of tea. Therefore, the income derived from sale of the trees will clearly come within the ambit of the expression any income derived from such land by agriculture. 8. Admittedly, in this case in hand, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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