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TMI Blog2012 (7) TMI 419X X X X Extracts X X X X X X X X Extracts X X X X ..... s and the assessee was able to earn Rs. 66,820/- from the sale of coconuts – Held that:- Assessee has not produced any concrete evidence to show that it has earned income from sale of coconuts - assessee is a small time farmer. He may not have maintained record of sale of coconuts - 50% income from sale of coconut is directed to be considered as Agricultural Income. Regarding income from sale of turmeric - contention of the Assessing Officer that there is no correlation between the date of alleged sale of turmeric and the harvesting season of the produce is not tenable - stand of the assessee throughout has been that the assessee use to sell the produce only during the time when he used to get maximum price for the crop – Held that:- Assessing Officer made the addition only on the basis of presumption that since the harvesting season and sale of crop do not coincide, the income cannot be considered as agricultural income - addition made by the Assessing Officer deleted - ITA No.574/Mds/2012 - - - Dated:- 25-5-2012 - SHRI ABRAHAM P.GEORGE, SHRI VIKAS AWASTHY, JJ. Appellant by : Mr. Philip George, Advocate Respondent by : Mr. Jayanagayan, CIT DR O R D E R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onuts. Ground no.4 relates to disallowance of income from sale of turmeric under the head Agricultural Income . 4. Mr. Philip George, counsel appearing for the assessee submitted that the assessee has treated income from poultry farming, dairy farming, coconut trees and cultivation sale of turmeric as agricultural income. The Assessing Officer has disallowed income from all the above sources as agricultural income and treated the income from sale of Emu Birds as income from business. He submitted that the Assessing Officer and CIT(A) have erred in not allowing expenditure incurred by the appellant /assessee towards purchase of birds, feeding expenses of the earlier years etc. The assessee has not claimed expenditure towards feeding and maintenance cost of Emu birds in the earlier years. 5. As regards the income from sale of coconuts, the A.R. submitted that there were about 275 coconut trees out of which 200 coconut trees were seedling and non-yield producing stage. It was during the relevant previous year only that 200 coconut trees have started yielding. The gestation period of coconut trees is approximately three years. It is, thereafter, that the trees start bearing fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,300/-; and assessment year 2008-09 Rs. 1,63,490/-). Thus, the net profit as claimed by the assessee on sale of Emu birds is Rs. 84,210/-. The Assessing Officer has added back the cost of purchase of Emu birds as well as expenses incurred during the year 2007-08 (Rs. 92,300/-) towards feeing of the birds. In our considered opinion, the cost of purchase of Emu birds and the expenditure on the maintenance /feeding of birds should have been allowed by the Assessing Officer. The Assessing Officer has failed to appreciate the fact that without purchase of Emu birds, sale would not have been possible, so the cost of acquisition of Emu birds and the maintenance/feeding cost which the assessee has alleged not to have claimed during the assessment year 2007-08 deserves to be allowed as business expenditure. We, therefore, allow ground No.2 of the assessee. 8. With regard to second issue i.e. income from sale of coconuts, the Assessing Officer has disallowed the entire amount as agricultural income from sale of coconuts. The Assessing Officer while treating the income from sale of coconut trees as income from other sources has observed that it is not acceptable that Rs. 2,400/- worth of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding fruit. We are, therefore of the considered opinion that growing of coconut trees require basic minimum of skill, labour etc. Therefore, the income earned from coconut trees deserves to be treated as agricultural income. However, as per the documents on record, the assessee has not produced any concrete evidence to show that it has earned income from sale of coconuts. A perusal of records shows that the assessee is a small time farmer. He may not have maintained record of sale of coconuts. However, in view of un-rebutted fact that the assessee had purchased land in the assessment year 2004-05, and that he had planted coconut trees on the same, to meet the ends of justice, it would be just and appropriate if 50% of the amount claimed by the assessee is allowed as income from sale of coconuts and is treated as Agricultural Income. Therefore, this ground of the assessee is partly allowed and the addition made by the Assessing Officer is deleted to that extent. The 50% income from sale of coconut is directed to be considered as Agricultural Income. 9. The third issue raised by the assessee in this appeal is regarding income from sale of turmeric . The Assessing Officer has made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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