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TMI Blog2015 (11) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... tative, submitted that the first issue that arises for consideration is with regard to addition of Rs. 36,53,083 under the head "Income from other sources". According to the learned Departmental representative, the assessee claimed Rs. 23,55,490 as agricultural income from the coffee estate. The Assessing Officer found that the assessee owned a coffee estate to the extent of 21.20 hectares. The Assessing Officer found that the possible yield from one hectare of land is 948 kgs for Robusta variety for the financial year 2005-06. In fact, the Kerala Coffee Board estimated the yield at 711 kgs per hectare. Since the estate of the assessee is situated in the State of Kerala, the Assessing Officer estimated the maximum coffee productivity from 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, the Assessing Officer disallowed a sum of Rs. 49,51,118. According to learned counsel, the Assessing Officer disbelieved the claim of the entire agricultural income. Referring to the order of the Commissioner of Income-tax (Appeals), learned counsel submitted that the disallowance made by the Assessing Officer to the extent of Rs. 49,51,118 was greater than the sale of agricultural produce claimed by the assessee at Rs. 40,03,084. 4. Learned counsel for the assessee further submitted that the Assessing Officer arrived the yield per hectare at 5,849 kgs. and compared the same with the report published by the Coffee Board of India and Kerala Coffee Board. According to learned counsel, the Commissioner of Income-tax (Appeals) found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, and twenty-five per cent. of such income shall be deemed to be income liable to tax. (1A) Income derived from the sale of coffee grown, cured, roasted and grounded by the seller in India, with or without mixing chicory or other flavouring ingredients, shall be computed as if it were income derived from business, and forty per cent. of such income shall be deemed to be income liable to tax. Explanation.-For the purposes of sub-rules (1) and (1A) 'curing' shall have the same meaning as assigned to it in sub-section (d) of section 3 of the Coffee Act, 1942 (7 of 1942). (2) In computing the incomes referred to in sub-rules (1) and (1A), an allowance shall be made in respect of the cost of planting coffee plant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not engaged in other processing activity. Therefore, this Tribunal is of the considered opinion that income from coffee estate has to be computed by applying rule 7B of the Income- tax Rules, 1962. Therefore, the order of the Commissioner of Income-tax (Appeals) is set aside and the entire issue is remitted back to the file of the Commissioner of Income-tax (Appeals). The Commissioner of Income-tax (Appeals) shall apply the provisions of rule 7B and thereafter compute the income from coffee estate. 7. The next ground of appeal is with regard to disallowance of expenditure to the extent of Rs. 11,90,535. 8. We heard the learned Departmental representative and learned counsel for the assessee. The Assessing Officer found that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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