2022 (11) TMI 843

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.... referred to as the 'Act'). The assessee in this appeal has taken the following grounds of appeal: "1. That the Ld. CIT(A) erred in considering the receipt of Rs. 75,84,192/- from NHAI as business income without appreciating the fact that the same was on account of sale of Tea bushes, which is duly exempted u/s 10 of the IT Act,1961. 2. That the Ld. CIT(A) erred in considering the receipt of Rs. 17,47,763/- from NHAI as business income without appreciating the fact that the same was on account of sale of trees (Shade Trees), which is duly exempted u/s 10 of the IT Act, 1961 3. That the Ld. CIT(A) erred in considering the receipt of Rs. 51,36,869/- from NHAI as business income without appreciating the fact that the....

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....essed. The Ground Nos.3, 4, 5 & 6 are accordingly dismissed as not pressed. 3. Now, we are left with Ground Nos.1 & 2. The assessee vide Ground Nos.1 & 2 has contested the action of the lower authorities in treating the receipt of Rs.75,84,192/- from National Highways Authority of India (NHAI) on account of sale of tea bushes and further another receipt of Rs.17,47,763/- received on account of sale of trees as business income of the assessee. 4. The brief facts of the case are that the assessee company during the year received a total compensation of Rs.4,45,53,602/- from NHAI on account of compulsory acquisition of agricultural land along with standing crops of tea bushes, shade trees and labour quarters constructed on land. The bifu....

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....gricultural produce which is exempt u/s 10 of the Act. Our above view is fortified by the decision of the Hon'ble Jurisdictional Calcutta High Court in the case of CIT vs. Kanan Devan Hills Produce Company Ltd. (1993) 200 ITR 453 wherein the Hon'ble High Court has held as under: "...... But in the case before us, the trees are not of spontaneous growth. They have been planted by the assessee for the purpose of protecting the tea bushes. It cannot be doubted that agricultural operations have taken place on the land on which the trees have been planted. Basically, the land has been under cultivation for production of tea. In the case of Megh Raj v. Allah Rakhia AIR 1942 FC 27; [1942] FCR 53, the Federal Court confirmed a decision of ....