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TMI BlogAgricultural income-Manufacture and sale of tea-Whether agricultural produce-Section 2(1)-RegardingX X X X Extracts X X X X X X X X Extracts X X X X ..... e-Manufacture and sale of tea-Whether agricultural produce-Section 2(1)-Regarding. Section 2(1) of the I.T. Act, 1961, defines "agricultural income", inter alia, to mean any rent or revenue derived from land which is situated in India and is used for agricultural purposes. Further, any income derived from such land by the performance by a cultivator or receiver of rent-in-kind of any process ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as common ground that tea leaves had been put through the process of withering, crushing, roasting and fermentation before being packed and sold by the assessee. The Supreme Court held that the tea leaves did not cease to be an agricultural produce merely because of the performance by the assessee of the processes outlined above. 3. Reference has been received in this connection on the effect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from entry 46 of List II of the Seventh Schedule to the Constitution which refers to "Taxes on agricultural income". The term "agricultural income" has been defined in art. 366(1) of the constitution as meaning "agricultural income defined for the purposes of the enactments relating to Indian income-tax". The legislative competence of the State Legislature is thus restricted by the definition of " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. This is only on the basis that this is not agricultural income and it is only the balance of 60 per cent. which is agricultural income for the purpose of the Income-tax Act and also for the purposes of entry 46 of the State List. 6. In view of the foregoing, the income from tea grown and sold in India will continue to be computed in terms of rule 8 of the I.T. Rules, 1962. 7. These instruct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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