TaxTMI 
TaxTMI 
2023 (2) TMI 1415
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....tances of the case and in the law the lower authorities have erred in applying the provisions of Rule of 7 of Income Tax Rules, 1962, thereby treating the income earned from sale of raisins as business income of the Appellant. Your appellant's Contentions is that provisions of Rule 7, do not apply as process of making dry grapes (raisins) from grapes is ordinarily employed process by farmers and therefore such dry Grapes (Raisins) is agricultural Produce and therefore consequential profit is not liable for tax. Accordingly, it is prayed that addition of Rs. 10,03,721/- may kindly be deleted." 3. Briefly, the facts of the case are as under :- The appellant is a partnership firm formed for the purpose of carry out agricultural act....
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....e of Rs.10,03,721/-. 4. Being aggrieved by the above assessment order, an appeal was filed before the ld. CIT(A), who vide impugned order confirmed the action of the Assessing Officer by holding that the decision relied upon by the appellant in the cases of CIT vs. S. G. Bhate, 62 ITR 71 (Bom.) and CIT vs. P.K. Veeran, 54 ITR 393 (Kerala) were not applicable to the facts of the present case. 5. Being aggrieved, the appellant is in appeal before us in the present appeal. 6. It is submitted that the process undertaken by the appellant for conversion of grapes into raisins is an ordinarily employed by the cultivator to render the products fit to market and, therefore, Rule 7 of the Rules has no application to the facts of the present ....
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....lands. The grapes so grown were subject to further processing to convert the grapes into raisins. It is also an admitted fact that the appellant is also engaged in the business of purchase and sale of raisins and agency commission business. The Assessing Officer was of the opinion that the process undertaken by the appellant for the purpose of converting the grapes into raisins is not an ordinarily process employed by any cultivator to render the produce fit to be taken into the market. The Assessing Officer also set out the process undertaken by the appellant to convert the grapes into raisins vide para 12 of the assessment order, from which it would be clear that the process involves dipping in solutions containing chemicals and then dryi....
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....e question as to the process employed by an assessee was a process ordinarily employed by the cultivator to render the produce fit to be taken into the market was essential question of fact. The Hon'ble Supreme Court in the case of CIT vs. R. Venkataswamy Naidu, 291 ITR 529 (SC) held that the onus lies upon the assessee claiming exemption to prove that the claim of the assessee falls within the exemption condition. Though in the written submission filed before us, the appellant made a bald submission that there was no ready market for the grapes grown, this fact was not proved by adducing the necessary evidence. More particular, in view of the fact that the appellant firm also engaged in trading of raisins, the submission made by the assess....