Syed Mohamed Sathik Ali Vs ITO (ITAT Chennai)
Chennai Tribunal examined whether income from sale of Silver Oak trees could be taxed as capital gains. AO assessed total income at ₹17,86,320 by denying Assessee’s claim of ₹12,08,520 as agricultural income & treating sale of cut Silver Oak trees as capital gains. CIT(A) confirmed the view.
Assessee argued that Silver Oak trees are shade trees in tea estates, not of spontaneous growth, but planted, nurtured, periodically maintained & cut, thus constituting agricultural produce. Tribunal relied on Madras HC decision in United Nilgiri Tea Estates Co. Ltd holding that Silver Oak trees, requiring human effort & not growing wild, qualify as agricultural produce. Tribunal noted Revenue could not dispute this legal position. Following the binding judgment, Tribunal deleted the addition & directed AO to treat sale proceeds of Silver Oak trees as agricultural income. Appeal allowed.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order dated 30.06.2025 passed by the Addl/JCIT(A)-1, Nashik for the assessment year 2017-18.
2. The assessee raised 5 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made as income from capital gains denying the claim of agricultural income in the facts and circumstances of the case.
