The Income Tax Appellate Tribunal (ITAT) Ahmedabad bench held that income from engaging in nursery activities of growing various types of lawns, flower plants and vegetables plants is agricultural Income, Could not be levied under Business Income.
Assessee, Talshibhai B Narola filed return of income for the Assessment Year 2013-14 showing total income at Rs.1,97,520/- along with agricultural income at Rs.75,42,750/-. Thereafter the assessee case was selected for scrutiny.
During the assessment proceedings the AO made addition in respect of income from other sources along with addition of Rs.18,625/- under the same head and also made addition iin respect of business income.
The Assessing Officer also took into account agricultural income of Rs.85,42,750/- out of this agricultural income of Rs.11,68,970/- and treated the same as business income/income from other sources and assessed the agricultural income at Rs.73,73,780/-.
Therefore, the AO considered that activity of agriculture in nature in respect of engaging in nursery activities of growing various types of lawns, flower plants and vegetable plants and they are commercial activities. Thus it will be calculated as business income.
Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A], who dismissed the appeal due to no representation. Thereafter the assessee filed another appeal before the tribunal.
Counsel for the assessee submitted that assessee is engaged in nursery activities and does not carry any other business activities during the year under consideration. Hence, income from agricultural activities cannot be treated as business income.
Counsel for revenue supported the decisions of lower authorities.
It was observed by the tribunal that activity of agriculture in nature in respect of engaging in nursery activities of growing various types of lawns, flower plants and vegetable plants cannot be considered as commercial activity for treating the same as business income.
It was also proved from the relevant copies of the sales bills as well as the transaction details from Bank Account as well as books of account including Ledger and Invoices, the tribunal bench noted.
Thus the tribunal found that assessee is non-compliant not only before the CIT(A) but also before the Assessing Officer. The issue in dispute raised before the tribunal has not been decided on merit.
After considering the facts submitted by both parties, the two member bench of Annapurna Gupta (Accountant Member) and Suchitra Kamble (Judicial Member) held that income from engaging in nursery activities of growing various types of lawns, flower plants and vegetables plants is agricultural Income, Could not be levied under Business Income.
Rohit Asudani appeared for the revenue and Mehul K. Pateli appeared for assessee.
Keywords: Income, Nursery Activities, growing, lawns, Flower Plants, Vegetable Plants, Agricultural Income, levy, Business Income , ITAT
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