TaxTMI 
TaxTMI 
2002 (7) TMI 82
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.... assessee filed his objections. On the basis of that, the assessment orders came to be passed. In his returns, the assessee had shown certain income as income from "shooting hiring charges" in the sense that the assessee used to permit the film-shooting in his premises, which was known as "Vijaya Gardens", and used to charge for the same. The assessee claimed that those charges amounted to "agricultural income" as the said premises was used for the agricultural activities also. The assessing authority, however, treated it as "business income". The assessee, therefore, filed three separate appeals before the Tribunal. The Tribunal disposed of those appeals holding against the assessee on the basis of the earlier orders passed that the income earned by the assessee by way of film shooting hire charges could not amount to "agricultural income". It is this common order of the Tribunal which is the subject-matter of the present references. The assessee admittedly owns the premises called "Vijaya Gardens" and used to allow film producers to shoot their films in that garden. The simple case of the assessee, as pleaded by Mr. Uttam Reddy, is that the assessee used to grow agricultural pr....
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....which the receiver of the rent or revenue or the cultivator, or the receiver of rent-in-kind, by reason of his connection with the land, requires as a dwelling house, or as a store-house, or other out-building;" The whole thrust of the assessee appears to be as against clause (a) of the section. The assessee probably wants that any rent derived from the land should be enough to cover the charges recovered for permission to do the film shooting on the lands. In his arguments, learned counsel merely took the line that but for the agricultural activity of growing something on the land, the film producers would not have been interested in carrying out the shooting of their films on that land and, therefore, the activity of the film-shooting for which the hire-charges were recovered and the income generated would be directly relatable to the land and the agricultural operations thereupon and would, therefore, render such income as "agricultural income". The argument is wholly incorrect. The subject of "agricultural income" came up for consideration before the Supreme Court in CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466. In the said decision, the Supreme Court was considering ....
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....reserve the same not only from insects and pests but also from depradation from outside, tending, pruning, cutting, harvesting and rendering the produce fit for the market. The Supreme Court observed that these latter activities were taken in conjunction with the basic operations then alone it could be said that though they were divorced from the basic operations, they could still have the character of agricultural operations. The Supreme Court further observed in the following words: "We are of opinion that the mere performance of these subsequent operations on the products of the land, where such products have not been raised on the land by the performance of the basic operations which we have described above would not be enough to characterise them as agricultural operations. In order to invest them with the character of agricultural operations, these subsequent operations must necessarily be in conjunction with and a continuation of the basic operations which are the effective cause of the products being raised from the land. It is only if the products are raised from the land by the performance of these basic operations that the subsequent operations attach themselves to the ....
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....rations, have also not been held to be agricultural operations at all and the income therefrom has not been heightened to the level of the "agricultural income". Here, the shooting of the films is the activity which has absolutely no nexus whatsoever with the agricultural operations or as the case may be with the land excepting that the shooting is done on the land which may be or have been an agricultural land yielding some agricultural income. The nexus, as claimed by the assessee, is non-existent, far-stretched and illusory. If the argument of Mr. Uttam Reddi is to be accepted then anything done and everything done on the land would reach the pedestal meant for "agricultural income" and would yield absurd results. Such interpretation is, therefore, not permissible. The judgment of the Supreme Court in Raja Benoy Kumar's case [1957] 32 ITR 466 was followed by this court in State of Tamil Nadu v. V. G. P. Housing (P.) Ltd. [1993] 201 ITR 412 though in a different context. There the assessee had wanted the "rental income" of the land, which was used for a beach resort, as his part of the land was used for the agricultural operations also yielding agricultural income. While holdin....