2022 (2) TMI 638

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....perused. 2. The appeal filed by the assessee is barred by limitation by 11 days. She has moved a condonation explaining reasons thereof. We have heard both the parties on this preliminary issue. Having regard to the reasons given in the petition, we condone the delay and admit the appeal for hearing. 3. The assessee pleads the following substantive grounds in the instant appeal: "1. The order of the Pr CIT-2, Hyderabad in holding that the operations carried on by the appellant were not agricultural in nature is totally contrary to the facts and evidence on record and therefore unsustainable both on facts and in law. 2. The Ld. Pr. CIT failed to note that the income derived from some of the banana saplings which are s....

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....e Ld. Pr. CIT failed to note that the issue involved was capable of more than two views and the Assessing Officer having adopted one of them the Principal CIT failed to note that under such circumstances an order cannot be said to be prejudicial to the interest of Revenue. 7. The Learned Pro CIT failed to appreciate that the Appellant's unit was registered with government authority as carrying on horticulture activity and is therefore eligible for exemption U/S 2(1A) of the Act as agriculture operations." 4. We advert to the basic relevant facts. This assessee is stated to be engaged in the activity of production and sale of tissue cultured plants. She had filed her return for the impugned assessment year on 16.02.2016 admit....

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....tissue culture involved following steps: (i) Phase Zero: At this stage, steps taken before the actual process of tissue culture is initiated. It involves selection of appropriate mother plant and keeping it decease free in natural conditions of land. Assessee under consideration is not carrying out any activity at this stage. The present assessee clearly explained in her submission that the suckers are collected from the well maintained banana field and also booked expenditure of Rs. 1,07,700/- towards suckers purchase of plants. Thus it is evident that the mother plants are being purchased from the banana farms and not grown by assessee herself by application of human labour and energy on the land. (ii) Phase One....

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.... kept till the plantation in main farm. It is evident from the above discussion that the plant tissue culture is used 'to reproduce clones of plant to get multiple plants with same traits by placing various tissues of the mother plant in containers and required medium which is definitely not consisting of land or soil." 7. As per Section 2(1A) in The Income- Tax Act, the term "agricultural hc.or;-.es(sic) means- (a) Any rent or revenue derived from land which is situated in India and is ='5SC for agricultural purposes; (b) Any income derived from such land by. 6. She has thereafter quoted a catena of case law that such an exemption claim accepted at the Assessing Officer's behest during the course of the imp....