Pisciculture income treated as agricultural income; revision under section 263 failed where no assessment error was shown.

Breeding and rearing fish on low-lying agricultural land was treated as pisciculture, so the resulting sale proceeds were characterised as agricultural income and not assessable as income from other sources. Revisional power under section 263 could not be sustained for the miscellaneous income item because no specific error in the assessment order had been identified. The revisional order was therefore quashed to that extent, and the assessee succeeded.

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Issues: (i) whether income from breeding, rearing and sale of fish from low-lying agricultural land constituted agricultural income and was therefore outside the tax net; (ii) whether the revisional order under section 263 of the Income-tax Act, 1961 could be sustained in respect of the miscellaneous income item where no error in the assessment order had been pointed out.

Issue (i): whether income from breeding, rearing and sale of fish from low-lying agricultural land constituted agricultural income and was therefore outside the tax net

Analysis: The assessee used the land both for cultivation and for fish farming during the rainy season. The activity described was breeding and rearing of fish, which fell within pisciculture. On that footing, the income generated from such activity and sale of fish was treated as agricultural income within the meaning of the Act.

Conclusion: The income from fish farming was held to be agricultural income and could not be assessed as income from other sources.

Issue (ii): whether the revisional order under section 263 of the Income-tax Act, 1961 could be sustained in respect of the miscellaneous income item where no error in the assessment order had been pointed out

Analysis: The revisional jurisdiction could be invoked only where the assessment order was shown to be erroneous. In relation to the miscellaneous income item, no specific error in the assessment order had been identified, and the matter had been merely called for examination.

Conclusion: The revisional order was quashed in respect of the miscellaneous income item.

Final Conclusion: The assessee succeeded in challenging the revisional order, and the appeal was allowed in full.

Ratio Decidendi: Breeding and rearing of fish on land used in the relevant manner amounts to pisciculture and its income is agricultural income; revisional power cannot be exercised under section 263 unless the assessment order is shown to be erroneous on the point revised.

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