TaxTMI 
TaxTMI 
2011 (8) TMI 302
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.... 4. The Department took up the matter in appeal before the Hon'ble Jurisdictional High Court under section 260A of the Income Tax Act against the common order dated 16.05.2005 and the Hon'ble High Court in T.C.(A) No. 167 and 168 of 2008 dated 29.04.2011 has decided the legal issue against the assessee by allowing the appeals of the Department and remitted the case on merits only back to the Tribunal for deciding the appeals afresh. 5. As regards case on merits is concerned, in the appeal of the assessee in ITA No. 2850/Mds/2004 for the assessment year 2000-01, the assessee raised in all 12 grounds, but at the time of hearing, the ld. Counsel for the assessee pressed ground No. 7 and 11 and rest of the grounds were not pressed. So, by making endorsement in the memo of appeal to this effect, the assessee's counsel insisted for adjudicating ground No. 7 and 11 only, which read as under: "7. The learned Assessing officer has erred in arriving at the conclusion that the income earned by the appellant does not constitute agricultural income without considering the facts and circumstances of the case. 11. The learned Assessing Officer has erred in levying....
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....T v. Raja Benoy Kumar Sahas Roy (supra) has not been interpreted properly, wherein the emphasis is on the income, which should be from agricultural operation. 7.2 The ld. CIT(A), while considering the appeal of the assessee for the assessment year 2000-01 has confirmed the action of the Assessing Officer as per para 4.2 of his order, which reads as under: "4.2 I have considered the rival submissions. Here, the dispute is that income from the sale of green tea leaves is agricultural income in nature or not. The appellant company had taken on lease a land from M/s. Woodbriar Estates Ltd., a holding company of the appellant company, holding 94% of the shares of Wilson and CO. Ltd. The appellant has taken the land on lease along with tea bushes and hence it cannot be said to have grown the tea. The appellant company has not done any basic agricultural activities of sowing seeds or tiling the land. I have perused the orders of the agricultural Income Tax Officer in this regard. The Assessing Officer in his order placed reliance on the decision of Hon'ble Supreme Court in the case of CIT v. Raja Benoy Kumar Sahas Roy (1957) reported in 32 ITR 466 which is squarely cov....
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....r the assessee has taken lease the land with tea plant bushes. Therefore, neither the Assessing Officer is right in treating the agricultural income as income from other sources nor the ld. CIT(A) is justified in confirming the orders of the Assessing Officer for both the years in this regard, it was thus, pleaded for treating the income generated through sale of green tea leaves as agricultural income. 8. The ld. DR strongly pleaded that the assessee has taken on lease 49.50 acres of land with plant bushes and it just did harvesting of such green tea leaves and sale of the same in the market. The assessee has taken the land on lease along with the tea bushes and hence it cannot be said to have grown the tea. The tea leaves grow on the bushes and the assessee has only tended the bushes and sold the green tea leaves. The assessee has not done the basic operation of the cultivating the tea bushes. The case law relied upon by the Assessing Officer titled v. Raja Benoy Kumar Sahas Roy (supra) of Hon'ble Supreme Court is fully applicable because necessary agricultural operations as envisaged for carrying out agricultural activity has not been performed by the assessee on the l....
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.... with reference to section 8(3) - Income-Tax Act, 1961 and Rule 8 of the Income Tax Rules, 1962, in the case titled Union of India and Another v. Belgachi Tea Co. Ltd. and Others reported in 304 ITR 1, the Hon'ble Supreme Court hasw dealt with similar issue while discussing the facts of the case. The head-notes and held portion are as under: "AGRICULTURAL INCOME-TAX-ASSESSEE HAVING TEA ESTATE-SELLING TEA MANUFACTURED IN ITS FACTORY AS WELL AS GREEN TEA LEAVESASSESSEE LIABLE TO PAY AGRICULTURAL INCOME-TAX ON 60 PER CENT. OF A,C1UCULTURAL INCOME DETERMINED BY OFFICER IN THE CENTRE FOR PURPOSES OF INCOME-TAX ACT, 1961- ASSESSEE ALSO LIABLE UNDER BENGAL AGRICULTURAL INCOME-TAX ACT, 1944, IN REGARD TO INCOME FROM SALE OF GREEN TEA LEAVES-BENGAL AGRICULTURAL INCOMETAX ACT, 1944, s. 8(3)-INCOME-TAX ACT, 1961-INCOME-TAX RULES, 1962, r. 8. The assessee-company carried on the business of growing and manufacturing tea in its tea estate, which consisted of tea gardens and a factory to manufacture tea. The assessee sold the tea grown and manufactured by it and also sold green tea leaves. It filed a writ petition in the High Court, which was disposed of by the High Court hold....
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....ng the ratio of the above noted decision, hold that the activity of the assessee in growing tea and sale of green tea leaves is an agricultural activity irrespective of the fact whether it is carried on leased land or self-owned land. Since no part of the expenses as disclosed by the assessee or other details have been disputed by the Assessing Officer, therefore, while reversing the orders of authorities below, we direct the Assessing Officer to accept the declared net income on account of sale of green tea leaves (after deducting expenses as shown) as income from agriculture for both the years. 11. The second common issue raised in both the appeals is with regard to charging of 234B interest. It was very fairly conceded by the ld. Counsel for the assessee that since charging of interest under section 234B is consequential, so direction should be issued to charge the same keeping in view the income finally assessed after giving effect to the order to be passed in these appeals. To such plea, the ld. DR did not object. As such, the Assessing Officer is directed to charge 234B interest on finally assessed income on giving effect to this order of the Tribunal. 12.....