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TMI Blog2013 (11) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... s liable to be treated only as agricultural income – Assessing Officer's contention that the assessee cannot own agricultural land, as per the Karnataka Land Reforms Act, 1961, has no relevance to the issue on hand. - Decided against Revenue. - - - - - Dated:- 7-9-2012 - Order The order of the Bench was delivered by Jason P. Boaz (Accountant Member).-This appeal by the Revenue is directed against the order of the Commissioner of Income-tax (Appeals)III, Bangalore, dated February 11, 2011 for the assessment year 2006-07. The facts of the case, in brief, are as under: The assessee-company (hereinafter referred to as "assessee") engaged in the business of production of agricultural goods filed its return of income for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the income derived in the relevant period was "agricultural income" and not "income from other sources" as held by the Assessing Officer and allowed the assessee's appeal. Aggrieved with the order of the learned Commissioner of Income-tax (Appeals), the Revenue is now in appeal before us. The grounds raised by the Revenue in this appeal are as under : "1. The order of the learned Commissioner of Income-tax (Appeals) is opposed to law and facts of the case. 2. The Commissioner of Income-tax (Appeals) erred in holding the income derived from land taken on lease by the company from one of the directors as agricultural income without appreciating that the company is barred by law in holding the land and the intention of lease is to en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treating the income as agricultural income despite the assessee carrying on agriculture as a commercial activity in the nature of contract farming and such income takes the character of business income. Learned counsel for the assessee, on his part supported the finding in the order of the learned Commissioner of Income-tax (Appeals). In support of the assessee's claim that the income derived by it from carrying on agricultural operation was agricultural income. Learned counsel for the assessee placed reliance on the following judicial pronouncements. (i) CIT v. K. S. Imam Saheb [1969] 71 ITR 742 (Mad) wherein it had been held that income derived from land which is used for agricultural purposes is agricultural income. (ii) CIT v. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities on the land in the relevant period, growing thereon red, yellow and green capsicum, culinary herbs, etc., which were both sold in the domestic market and exported to the Netherlands. We also find that the learned Commissioner of Income-tax (Appeals) has recorded that the assessee has furnished proper evidence in respect of purchase of material for green house, agricultural equipment, seeds, wages as well as evidence for sale of final agricultural production to various entities which establishes it that the assessee has received agricultural income from agricultural operation carried out during the relevant period. All these facts narrated above go to establish that the assessee had only carried out agricultural activities during t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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