Case Law Details
Profarm Seed India Private Limited Vs ITO (ITAT Hyderabad)
ITAT Hyderabad held that merely because the assessee took the land on lease for conducting their research operations to produce the foundation seeds of the hybrid varieties, such a lease cannot ipso facto make the operations of the assessee as contract farming.
Facts-
The assessee engaged in the business of producing foundation seeds, by conducting agricultural operations on agricultural lands and have been selling the same which are sold to various seed Companies like Godrej Seeds, Nath Seeds, Super Agri Seeds etc. According to AO, the assessee produces both foundation seeds and hybrid seeds and for the production of such hybrid seeds, the assessee carries out research and development activities which involve the scientific study of the parent seed and hybridisation of different varieties of parent seeds to evolve the high-yielding variety of hybrid seeds.
AO concluded that claim of assessee under section 10(1) to the tune of Rs. 2,39,14,201/- is business income of the assessee. CIT(A) deleted the said addition. Being aggrieved, revenue has preferred the present appeal.
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