TaxTMI 
TaxTMI 
2014 (7) TMI 1348
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Respondent : SRI K.V. ARAVIND, ADVOCATE JUDGMENT In this batch of appeals as a common question of law is involved, they are taken up for consideration together and disposed of by this common order. 2. In I.T.A.Nos. 346/12, 200/12, 199/12, 174/12, 173/12 and 172/12, the assessee is M/s. Namdhari Seeds which is a partnership firm engaged in cultivation and growing of seeds. In I.T.A.Nos.387/12, 388/12, 411/10, 287/13, 436/12 and 19/12, the assessee is M/s. Advanta India Limited, a public limited Company engaged in development and production of basic seeds and hybrid seeds. 3. The Assessee - Namdhari Seeds has filed this appeal against the order passed by the Tribunal holding that the income derived amounts to business income by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ompany and the cost of production is reimbursed to them and the produce is taken back by the company. The company thereupon cleans the hybrids seeds i.e., removes the mud, stones and non-standards sized seeds and then treats the seeds with chemicals to prevent infestation, packs the seeds into cloth bags to suit market requirements and dispatches the seeds to consignee agents located all over the country for sale to the distributors. Therefore, the question for consideration is whether the income derived by the assessee by sale of such seeds constitutes agricultural income or business income. 6. Agricultural income is defined under the Income Tax Act, 1961 (for short hereinafter referred to as 'the Act'). Section 2(1A)(a)(b) reads thus: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../s. Advanta India Limited, the said contention is accepted. 9. It is in this background, the substantial question of law that arises for our consideration in these batch of appeals is; Whether such an income will constitute an agricultural income or business income? 10. We have heard the learned counsel for the parties. 11. Several judgments of the Supreme Court and other Courts were relied upon including the judgment of this Court in M/s. Namdhari Seeds case itself. The Income Tax Act was enacted in the year 1961. Subsequently, throughout the country, laws are brought by each legislature bringing about agrarian reforms, because agricultural land falls in List-II of Schedule-VIII. The parliament kept the agricultural incom....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... but still he enters into contract with the land owners, gives them the monitory assistance and those land owners physically cultivate the land and grow the crops and when the assessee contends that crops grown belongs to him and he is selling them and therefore, it is an agricultural income, the question arises as to whether the exemption under Section 10(1) is attracted to such income? 14. Though, several judgments were cited contending that it is an agricultural income, we do not see in any of those judgments, they have taken note of this agrarian reforms. Most of the judgments are anterior to agrarian reforms. At any rate, the authorities have not applied their minds to these fundamental facts which are in the nature of jurisdictiona....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the ground that it is erroneous. We are not expressing any opinion over that aspect, we are only remanding the matter. Consequently, we set-aside the orders and it is open to the Assessing Authority, if it is convinced, after looking into the judgments of the Apex Court to record the very same findings. Therefore, the said question is kept open to be decided by the Assessing Authority, without in any way being influenced by the observations made by this Court in this order. 18. The Assessing Authority shall record a finding on the following facts: a) What is the extent of land these assessees hold in the States where they are growing seeds and then looking into the relevant Land Reforms Act to find out whether they are entitled ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the remaining portion being the agricultural income. In the facts of the cases, keeping in mind the law on point, the Assessing Authority is at liberty to apportion the said income, accordingly. f) If the Assessing Authority were to hold that income is an agricultural income in accordance with law, whatever, benefit to which they are entitled to, should be granted to them, which may in the form of deductions which the assessee is entitled to or in the form of losses. 19. In ITA No.434/2012: The second substantial question of law which arises in this appeal is as under: Whether the Tribunal was correct in holding that the assessee is entitled to deduction u/s.43B of the Act, in respect of belated remittance of employ....