Case Law Details
Nadeem Mohd. Abdul Vs ITO (ITAT Hyderabad)
On a literal reading of Clause (a) of sub-section 1A to Section 2 we find that it refers to any rent or revenue (emphasis supplied by me) derived from land which is situated in India and is used for agricultural purposes. This section does not specify that the land which is used for agricultural purposes should be owned by the assessee. Therefore, the land owned by the assessee as well as the land taken on lease by the assessee are to be treated as agricultural land provided other conditions are satisfied. Further, not only the revenue, but even the rent for the land which is used for agricultural purposes is to be treated as ‘agricultural income’. The A.Y relevant for this case is A.Y 201516, whereas the lease deed entered by the assessee with Adisa Agro (P) Ltd is September, 2013 i.e. A.Y 2014-15. From the lease deed, it is seen that the assessee had carried on agricultural operations during the previous year i.e. 2013-14 relevant to the A.Y 2014-15 and thereafter, the assessee has leased out this land to Adisa Agro (P) Ltd on 30.09.2013 i.e. during the previous year 2014-15 relevant to the A.Y 2015-16. Therefore, the assessee had carried on agricultural operations during the previous year 201314 and subsequently such agricultural land has been given on lease to a company which is also engaged in carrying on agricultural operations. The finding of the CIT (A) is that the crops grown are commercial in nature. The definition of ‘Agricultural Income’ does not limit its application to any particular crops/produce. The only requirement is that the basic agricultural operations are to be carried out. The nature of the crop being commercial in nature will not therefore, disentitle the assessee from claiming the income as ‘agricultural income’. Thus, the finding of the CIT (A) that the assessee’s intention of taking the agricultural lands on lease is to exploit them commercially is not sustainable to disentitle the assessee from making the claim of agricultural income. Having gone through the decisions relied by the learned CIT (A), I am of the opinion that they are all are distinguishable from the facts of the case before the Tribunal and therefore, are not applicable. In view of the same, I set aside the order of the AO and direct him to treat the lease rent received by the assessee from ‘Adisa Agro (P) Ltd’ for use of the agricultural land as agricultural income.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This is assessee’s appeal for the A.Y 2015-16 against the order of the CIT (A)-6, Hyderabad, dated 11.10.2019. The grounds of appeal raised by the assessee are as under:
“1. The order of the learned Commissioner of Income Tax (Appeals) dismissing the appeal, in the facts and circumstances of the case, is not correct both on facts and in law.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
