Cultivation of High Quality Foundation Seeds of Peas, Wheat, Paddy and Potato Constitute "Agricultural Activity": ITAT [Read Order]

The New Delhi Bench of Income Tax Appellate Tribunal recently held that cultivation of high quality foundation seeds of peas, wheat, paddy and potato constitutes “agricultural activity”.

Malook Singh, the assessee’s net agricultural income was Rs.28,54,310/- instead of Rs.14,19,800/- as declared by the assessee and based on the discussion treated the agricultural income as income from business. The assessing Officer was directed to re-compute the total income of the assessee and issue demand notice accordingly.

The CIT (A) held that the cultivation of high quality foundation seeds of peas, wheat, paddy and potato is different from normal agricultural activity. Against this, the assessee has submitted all the bills & vouchers for expenses like lease rent, power bills, fertilizer, seeds, labor, wages and details of sale and mandi receipts.

The assessing officer during the assessment proceedings, the similar income from the same agricultural operations and sale has been considered as agricultural income in the earlier assessment years as well as in the subsequent assessment years.

Hence, in view of the entire facts of the case, the Coram comprising  Dr B. R. R. Kumar, (accountant Member) Sh. Yogesh Kumar US (Judicial Member) observed that the appeal of the assessee is liable to be allowed on procedural technicalities as well as on merits of the issue. In the result, the appeals of the assessee are allowed.

To Read the full text of the Order CLICK HERE

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