9911796707
|
Home
Issues involved: Interpretation of exemption u/s 81(i)(c) of the Income Tax Act, 1961 for income derived from marketing agricultural produce processed with power.
Summary: The High Court of Karnataka addressed a common question regarding the entitlement of exemption u/s 81(i)(c) of the Income Tax Act, 1961 for income derived from marketing agricultural produce processed with power. The assessee, a cooperative society, marketed rice and oil from members after processing with power. The Income Tax Officer (ITO) disallowed the claim citing processing with power under cl. (e) of s. 81(i). The Appellate Authority Commission (AAC) allowed the claim, which was upheld by the Tribunal for income from marketing but not for processing charges. The department contended that cl. (e) restricts cl. (c) of s. 81(i), but the Court disagreed, citing precedents emphasizing distinct heads of exemption. The Court defined "marketing" broadly, encompassing all activities from production to consumer sale. As the goods were marketed after processing, falling under the business of marketing agricultural produce, the Court upheld the Tribunal's decision. Therefore, the question was answered in favor of the assessee, entitling them to costs. In conclusion, the High Court of Karnataka ruled in favor of the assessee, upholding the entitlement to exemption u/s 81(i)(c) for income derived from marketing agricultural produce processed with power.
|
