AI Drafter 
TaxTMI 
TaxTMI 
2004 (5) TMI 46
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....upreme Court decision in CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466. However, the assessing authority did not accept the appellant's plea, and hence held that the assessee's income was not agricultural income. True copy of the assessment order dated November 9, 2000, for the assessment year 1998-99 is annexure I to the appeal. Against the assessment order of the assessment year 1997-98, the assessee filed an appeal which was allowed by the Commissioner of Income-tax (Appeals), Kanpur, who held that the income is agricultural income and hence exempt from Income-tax. True copy of the order dated August 16, 2001, is annexure 2 to the appeal. The Department filed an appeal against the order of the Commissioner of Income-tax (A....
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....of cultivation of the soil. Section 10(1) of the Income-tax Act states that agricultural income shall not be included in the total income of any person for the purposes of assessing him to Income-tax. Section 2(1A) of the Income-tax Act defines "agricultural income" to mean: "(a) any rent or revenue derived from land which is situated in India and is used for agricultural purposes ; (b) any income derived from such land by- (i) agriculture ; or (ii) the performance by a cultivator or receiver of rent-in-kind of any process 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....
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....arried it in the nature of the product raised, viz., of its being fit for consumption by man or by beast; and (iii) Whether such operation would include pasturing of animals on the land and the allied pursuits of rearing, feeding and management of livestock and also include husbandry, farming, horticulture, etc., and making of butter and cheese-which are all included in the dictionary meaning of the word "agriculture". The controversy was settled by the Supreme Court in CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 which was heard and decided along with two other appeals in Kameshwar Singh (Maharajadhiraj Sir) v. CIT [1957] 32 ITR 587 (SC) and CIT v. Jyotikana Chowdhurani [1957] 32 ITR 705 (SC). This decision was followed by the....
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....tural operations. It may be mentioned that the nature of the produce raised has no relevance to the character of agricultural operation. Accordingly, "agriculture" would include horticulture, floriculture, arboriculture and sylviculture vide Pavadai Pathan v. Ramaswami Chetty, AIR 1922 Mad 351. It would include the raising of groves, plantations, grass or pasture. It would extend to cultivation of all commodities of (i) food value, such as, sugarcane vide CIT v. Ravalgoan Sugar Farm Ltd. [1947] 15 ITR 297 (Bom) ; Brihan Maharashtra Sugar Syndicate Ltd. v. CIT [19461 14 ITR 611 (Bom); tea vide Kaju Mal v. Salig Ram, AIR 1924 PC 1; [1924] ILR 5 Lah 50 (PC), coffee vide CIT v. Diwan Bahadur S. L. Mathias [1939] 7 ITR 48 (PC); affirming C....
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....velsami Naicker v. S. P. Sultan Ahmed Badruddin Rowther, AIR 1947 Mad 160, arecanuts and betel and the whole gamut of oshadhis ; and (vii) all things edible or otherwise deriving nutriment from the soil. Thus even cultivation of flowers of artistic and decorative value has been held to be an agricultural operation. In the present case, the Assessing Officer found that the assessee was maintaining a nursery at his residence 152, Swaroop Nagar, Kanpur. The Assessing Officer found that the assessee was not deriving income from any land used for agriculture. He was of the view that the nursery was maintained and run as a business quite independently of agriculture. Even if keeping of the nursery necessarily involves the use of some land a....
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....nd. After examining this aspect, the Assessing Officer has to examine the secondary operation carried out by the assessee. Mere performing of the secondary operation will not make the assessee's activity an agricultural activity as held by the Supreme Court. The Tribunal has also sought to distinguish the decision of the Madras High Court in CIT v. Soundarya Nursery [2000] 241 ITR 530. We find no illegality in the order of the Tribunal. The Tribunal has merely remanded the matter to the Assessing Officer for fresh inquiry after giving opportunity of hearing to the assessee, and to pass a fresh order in accordance with the decisions of the Supreme Court and this court. No exception can be taken to such a direction. As regards the conte....