AI Drafter 
TaxTMI 
TaxTMI 
2026 (4) TMI 1783
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.... 1. The impugned order is contrary to law, facts and circumstances of the case. 2. The order of the learned CIT(A) upholding the addition of 227,00,000/- is contrary to law and the facts of the case. 3. The learned CIT(A) erred in treating the receipt from the sale of rubber trees as non-agricultural business income, instead of holding it as agricultural income under section 2(1A) and exempt under section 10(1). 4. The learned CIT(A) failed to appreciate that the rubber trees formed part of cultivated plantation land subjected to continuous agricultural operations, and that agricultural income does not depend on whether the Appellant or a predecessor planted the trees. 5. The learned CIT(A) erred in char....
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....timately felled and sold as uneconomic and unyielding 9. The Appellant craves leave to add, alter, amend, or withdraw any of the above grounds of appeal at the time of hearing and to place such further facts and submissions as may be considered necessary in the interest of justice. 2. Brief facts of the case are that the assessee owns 15.44 acres of agricultural land, including 11.35 acres purchased in 2016 with 1,868 standing rubber trees. The assessee carried out regular agricultural operations such as manuring, weeding, and latex tapping. During the relevant year, 1,800 old and unproductive rubber trees were uprooted and sold for Rs. 27,00,000/- and replantation was undertaken. The assessee treated the receipt as agricultural....
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.... dismissed. Now assessee is in appeal before this Tribunal. 4. The ld.AR for the assessee submitted that the section 2(1A) focuses on agricultural operations on land, not on who planted the trees. The assessee conducted continuous agricultural operations (manuring, weeding, tapping, maintenance). Felling of old trees for replantation is a normal agricultural activity. Distinction drawn between Timber trading business (separate activity), and Agricultural operations on own land. He relied upon the following judicial precedents: o CIT v. Benoy Kumar Sahas Roy (SC) - agriculture includes human effort on land. o Kalpetta Estates Ltd. (Ker HC) - sale of plantation trees is agricultural income. o CIT v. Ambat Echu....
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.... old and unyielding rubber trees and sold the same, followed by replantation. The primary reasoning adopted by the Assessing Officer, as well as the ld. CIT(A), is that since the trees were not originally planted by the assessee and were acquired along with land, the income arising on their sale would not partake the character of agricultural income. We are unable to agree with this line of reasoning. 7. The definition of agricultural income u/s. 2(1A) emphasizes the performance of agricultural operations on land. The Hon'ble Supreme Court in CIT v. Raja Benoy Kumar Sahas Roy has laid down that agriculture involves basic as well as subsequent operations carried out with human skill and labour on land. The test, therefore, is not as to wh....
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....sly grown trees, which stand on a different footing. In cases involving wild or naturally grown trees, the element of human effort and cultivation is absent, which is not the situation in the present case. Here, the trees formed part of a cultivated plantation subjected to continuous agricultural operations. Further, reasoning of the ld. CIT(A) that the assessee is engaged in timber business and, therefore, the receipt should be treated as business income, is also not sustainable. Merely because the assessee carries on a separate timber business, the character of receipt arising from agricultural operations on its own land cannot be altered. The source and nature of the receipt must be determined independently. We also find that the charact....