DCIT Vs Sonu Monu Agro Pvt. Ltd. (ITAT Nagpur)
ITAT Nagpur held that cultivation of mushroom falls within the purview of agriculture and hence income from sale of mushroom is agricultural income which is eligible for exemption under section 10(1) of the Income Tax Act.
Facts-
During the year under consideration, the assessee–company was engaged in various activities namely Dall Mill, Cold Storage / Warehousing and Mushroom cultivation activity and produced Button Mushrooms meant for human consumption i.e., edible mushrooms.
The case was selected for complete scrutiny under CASS and statutory notice u/s 143(2) of the Income Tax Act, 1961. AO concluded that income derived by the assessee from growing of mushrooms is not agricultural income and hence assessed the same as income under the head “Business or Profession”.
CIT(A) allowed the appeal. Being aggrieved, revenue has preferred the present appeal.
Conclusion-
The Special Bench, DCIT v/s Inventaa Industries Pvt. Ltd., has held that “Hence as basic operations are performed by expenditure of human skill and labour on land by the assessee, which results in the raising of the „product‟ called “Edible white button mushroom” on the land and as this product has utility for consumption, trade and commerce, the income arising from the sale of this product is agricultural income and hence exempt u/s 10(1) of the Act”. Since the issue for our adjudication in this Departmental appeal is squarely covered by the aforesaid Special Bench decision, consistent with the view taken therein, we decline to interfere with the order passed by the first appellate authority and dismiss the grounds raised by the Revenue.
