TaxTMI 
TaxTMI 
2026 (5) TMI 1050
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....by the National Faceless Appeal Centre, Delhi dated 02.07.2025 wherein the Appeal filed by the Assessee against the Assessment Order dated 16.03.2022 passed u/s. 147 r.w.s. 144B of the Income Tax Act, 1961 was dismissed. The Assessee has challenged the Assessment Order raising following grounds of appeal: - i. On the facts and circumstances of the case, the learned First Appellate Authority (FAA) & AO were not justified in treating Rs. 28,91,906/- as Income under rule 7B of the Income tax Rules. ii. The learned AO has erred in applying Rule 7B of the income tax Rules, when the relevant Rule applicable is 7. iii. That the Appellant craves leave to add, alter, amend and to modify, substitute, delete and to rescind a....
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....if it were income derived from business and 40% of such income shall be deemed to be income liable to tax. Therefore, the AO was of the view that 40% of the production of coffee should be treated as business income. Out of the total agricultural receipts of Rs. 7,384,150 out of the total agricultural produce of Rs. 14,613,917 being 40% of Rs. 7,229,767 i.e. Rs. 2,891,906 should be treated as business income. 6. The claim of the assessee is that rule 7 of the income tax rules should be applied to the assessee and not rule 7B of the income tax rules. The learned assessing officer rejected the contention and made an addition of Rs. 2,891,906 to the assessed income under section 143(3) of the act as per the reassessment order passed on 16 Ma....
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.... applicable in the facts of the case. He referred to rule 7 and submitted that rule 7 is with general case of income which is partially agricultural and partially from business. He further submitted that rule 7A is specifically for income from the manufacture of rubber and rule 7B is specifically for income from the manufacture of coffee and rule 8 is specifically income from the manufacture of tea. As the Assessee is a curer of coffee and proprietor therein, provisions of rule 7B applies to that and therefore the applicability of rule 7, which is general, could not have been made applicable to the activity of the Assessee. 13. We have carefully considered the rival contention and perused the orders of the Ld. Lower Authorities. 14. R....
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....rmining such cost, no deduction shall be made in respect of the amount of any subsidy which, under the provisions of clause (31) of section 10, is not includible in the total income. 16. Thus, Rule 7B prescribes that the income in respect of the sale of coffee grown and cured in India shall be computed as if it were income derived from a normal business. 25% of such income is deemed as business income, and 75% of such income is deemed as agriculture income. Further, income derived from the sale of coffee grown, cured, roasted, and grounded in India, with or without mixing chicory or other flavoring ingredients, shall be computed as if it were income derived from a normal business. 40% of such income shall be deemed to be income liable to....