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TMI Blog1986 (3) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the assessee out of India as not 'agricultural primary commodities'. On that premise, deduction under section 80HHC had been given aggregating to Rs. 10,80,840. This consisted of two items. One was on the total export of Rs. 3,76,38,584, calculated at one per cent, to result in a deduction of Rs. 3,76,396 vide section 80HHC(1)(a). He had also given five per cent deduction on the incremental turnover of export in this year over the previous year under section 80HHC(1)(b). This deduction was Rs. 7,04,444. The Commissioner considered this order of the ITO to be erroneous and prejudicial to the interests of the revenue. Exercising jurisdiction under section 263 of the Act, he issued a notice and, after hearing the assessee, held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uits and vegetables are not agricultural primary commodities. To adopt this distinction, he took up the stand that agriculture and horticulture are different compartments in the kingdom of plants. Secondly, he contended that what is excluded in the section is agricultural primary commodities. He urged that fruits and vegetables do not fall within this classification. He stretched his argument to say that primary commodities of agriculture are main items such as paddy, wheat, jawar, etc., which are staple food for human consumption and that fruits and vegetables are not primary commodities. He also fairly argued that, in any event, they would be produce of plantation to be out of sub-section (2)(b)(i) of section 80HHC. Shri Jeltely, the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hnical meaning as noticed in Kanga Palkhivala's treatise on Law and Practice of Income-tax, Seventh end., Vol. 1, p. 4 and in this connection he brought to our notice the decision of the Supreme Court in CIT v. Nirlon Synthetic Fibres Chemicals Ltd. (1981) 130 ITR 14. While there can be no dispute in regard to this proposition, as rightly stated by Shri Jetley, the Courts cannot go by popular or commercial meaning attached to the term 'horticulture' particularly where there is a case law clarifying its limits. In common parlance, it may appear that horticulture is distinct from agriculture, but the distinction is more apparent than real. The case of Raja Benoy Kumar Sahas Roy is the leading precedent explaining the judicial interpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulture. It is pointed out, that 'agriculture' in its real sense means cultivation of a field involving of human skill and labour. The Madras High Court has in Murugesa Chetty v. Chinnathambi Goundan 24 ILR Mad. 421 observed that "distinction between agriculture when it is used otherwise that in its primary and more general sense and horticulture is a fine one even in England, and in India, especially it will be impossible in the case of several products of the land to draw a line between agriculture and horticulture according to English notions". Their Lordships specifically stated that cultivation either of the field in agriculture or of the garden in horticulture cannot be confined to any particular product. After considering the judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that in Raja Benoy Kumar Sahas Roy's case the terms examined were 'agriculture' and 'agricultural purposes' while we are faced with the expressions sought to be avoided. In our opinion, the case law cannot be successfully avoided on the reasons suggested, What is pertinent for us is to know the meaning ascribed to the word 'agriculture' and the judicial interpretation given to it in income-tax law. As we have shown, the scope and area of the word has been very clearly pointed out giving no room for any doubt. In its wider and general sense, it means raising of useful or valuable products which derive nutrient from the soil with the basic as well as subsequent operations. It thus includes horticulture. If the word 'agriculture' found in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. Vegetables and fruits exported by the assessee in their chief condition are agricultural primary commodities. 8. It was faintly contended that fruits and vegetables should, however, be construed as plantation crops. This argument is to be stated only to reject it. Plantation crops are only coffee, tea, rubber and by no stretch of imagination, they could be termed as plantation crops. 9. Agricultural produce could be anything grown or derived from land, if the word 'agriculture' is to be taken in its wider sense. If horticultural produce was intended to be excluded like plantation crops, it would have been specifically mentioned, for horticulture, like plantation, is a distinct part of agriculture. 10. For all the above reasons, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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