TaxTMI 
TaxTMI 
1986 (3) TMI 110
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....ntal turnover of export in this year over the previous year under section 80HHC(1)(b). This deduction was Rs. 7,04,444. The Commissioner considered this order of the ITO to be erroneous and prejudicial to the interests of the revenue. Exercising jurisdiction under section 263 of the Act, he issued a notice and, after hearing the assessee, held that the allowance of Rs. 10,80,840 given under section 80HHC was without eligibility inasmuch as the goods (fruits and vegetables) exported during the year were 'agricultural primary commodities not being plantation produce.' The assessee objected to this by its written submission contending (i) that fruits and vegetable cannot be regarded as agricultural primary commodities, and (ii) in any event, they are produce of plantation. The Commissioner hear the assessee and passed the impugned order whereby he recorded specific findings which are the subject of attack in the present appeal. He held that fruits and vegetables are articles or produce which ought to be treated as agricultural primary commodities and that they are not produce of plantations. The assessee had been directed to produce statements showing the items of export for the relev....
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....of commodities and there is nothing to assist us to deciding the question. The news items in Economic Times (dated 2-2-1985 and 22-1-1986) mention about Planning Commission's working group of horticulture suggesting export promotion of fruits and vegetables. They also do not throw any light to our discussion. 5. It was stated that agricultural commodity has not been defined in the Act and, therefore, the popular and commercial meaning to this term must be taken as distinct from the scientific or technical meaning as noticed in Kanga & Palkhivala's treatise on Law and Practice of Income-tax, Seventh end., Vol. 1, p. 4 and in this connection he brought to our notice the decision of the Supreme Court in CIT v. Nirlon Synthetic Fibres & Chemicals Ltd. (1981) 130 ITR 14. While there can be no dispute in regard to this proposition, as rightly stated by Shri Jetley, the Courts cannot go by popular or commercial meaning attached to the term 'horticulture' particularly where there is a case law clarifying its limits. In common parlance, it may appear that horticulture is distinct from agriculture, but the distinction is more apparent than real. The case of Raja Benoy Kumar Sahas Roy is t....
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....ordships have summed up : "In considering the connotation of the term 'agriculture' we have so far thought of cultivation of land in the wider sense as comprising within its scope the basic as well as the subsequent operations described above, regardless of the nature of the products raised on the land. These products may be grain or vegetables or fruits which are necessary for the sustenance of human beings including plantations and groves, or grass or pasture for consumption of beasts or articles of luxury such as betel, coffee, tea, spices, tobacco, etc., or commercial crops like cotton, flax, jute, hemp, indigo, etc. All these are products, raised from the land and the term 'agriculture' cannot be confined merely to the production of grain and food products for human beings and beasts as was sought to be done by Bhashyuam Ayyangar, J., in Murugesa Chetty v. Chinnathambi Goundan (1901) 24 ILR Mad. 421, or Sadasiva Ayyan, J., in Raja of Venkatagiri c. Ayyappa Reddy (1915) 38 ILR Mad. 738, but must be understood as comprising all the products of the land which have some utility either for consumption or for trade and commerce and would also included forest products such as timb....
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....ricultural commodity and such a distinction would be illogical. Vegetables and fruits exported by the assessee in their chief condition are agricultural primary commodities. 8. It was faintly contended that fruits and vegetables should, however, be construed as plantation crops. This argument is to be stated only to reject it. Plantation crops are only coffee, tea, rubber and by no stretch of imagination, they could be termed as plantation crops. 9. Agricultural produce could be anything grown or derived from land, if the word 'agriculture' is to be taken in its wider sense. If horticultural produce was intended to be excluded like plantation crops, it would have been specifically mentioned, for horticulture, like plantation, is a distinct part of agriculture. 10. For all the above reasons, we conclude that export of fruits and vegetables would not qualify for relief under section 80HHC. 11. The Commissioner held that relief allowable under section 80HHC was Rs. 7,872. This consisted of Rs. 1,386 granted as incremental turnover under sub-section (1)(b) of section 80HHC. The balance was relief granted under sub-section (1)(a) of that provision. He found that the export o....