A comprehensive and detailed analysis of agricultural income and taxation of the same. The article encompasses professional income, capital gains and method of computation of tax. Landmark case laws have also been included.
Objectives & Agenda :
To understand the procedure involved in search and seizure carried out by the Income Tax Department. To know the powers conferred onto the authorised officers during the search and seizure. To gain knowledge about the rights and duties of the assessee in the event of search and seizure. To throw some light with regards to the dos and don'ts during the search and seizure.
Key Takeaways:
- Provisions dealing with set-off and carry forward
- Inter-head and Inter-Source Set-off of Losses
- Carry Forward and Set-off of Losses in Special Cases
Charge of Income Tax
Income tax is charged in assessment year at rates specified by the Finance Act applicable on 1st April of the relevant assessment year.
It is charged on the total income of every person for the previous year.
Total Income is to be computed as per the provisions of the Act
Income tax is to be deducted at source or paid in advance wherever required under the provision of the Act.
Person u/s 2(31) includes,
An Individual,
Hindu Undivided Family (HUF),
A Company,
A Firm,
An Association of Persons(AOP) or Body of Individuals (BOI),
A Local Authority,
Every other Artificial Juridical Person
Incidence of Tax
Incidence of Tax
Objectives & Agenda :
To understand the procedure involved in search and seizure carried out by the Income Tax Department. To know the powers conferred onto the authorised officers during the search and seizure. To gain knowledge about the rights and duties of the assessee in the event of search and seizure. To throw some light with regards to the dos and don'ts during the search and seizure.
Key Takeaways:
- Provisions dealing with set-off and carry forward
- Inter-head and Inter-Source Set-off of Losses
- Carry Forward and Set-off of Losses in Special Cases
Charge of Income Tax
Income tax is charged in assessment year at rates specified by the Finance Act applicable on 1st April of the relevant assessment year.
It is charged on the total income of every person for the previous year.
Total Income is to be computed as per the provisions of the Act
Income tax is to be deducted at source or paid in advance wherever required under the provision of the Act.
Person u/s 2(31) includes,
An Individual,
Hindu Undivided Family (HUF),
A Company,
A Firm,
An Association of Persons(AOP) or Body of Individuals (BOI),
A Local Authority,
Every other Artificial Juridical Person
Incidence of Tax
Incidence of Tax
PERSON:
Income-tax is charged in respect of the total income of the previous year of every person. Hence, it is important to know the definition of the word person. As per section 2(31),Person includes:
an Individual
a Hindu Undivided Family (HUF)
a Company
a Firm
an Association of Persons or a Body of Individuals (BOI) whether incorporated or not
a Local Authority
every Artificial, Juridical person, not falling within any of the above
Code of civil procedure 1908 reference, review, revisionDr. Vikas Khakare
This explains what is reference, review and revision. when and where it can be made. It also explains difference between reference, review and revision.
Domicile of choice is the one an individual can acquire by his own choice. And to acquire such domicile proof of abandoning his origin domicile, mental intention to reside for a long term & habitual residence & physical presence etc. are inevitable.
OBJECTIVE
Liquidator is a person appointed by a Company or a Competent authority to manage the activities of winding up of the Company. Provisions pertaining to appointment of liquidator are stipulated under Chapter XX of Companies Act, 2013. The webinar covers the aspects of appointment of liquidator, types of liquidators, powers and duties of liquidator and judicial precedents.
Income Tax Act 1961
Capital Gain, Basis of Charge, Capital Asset U/s 2(14) Income Tax Act, Transactions that do not constitute TRANSFER U/s 47, Types of Capital Assets, Computation of STCG, Computation of LTCG, Tax Exemption for Capital Gain.
LLB LAW NOTES ON LAW OF TAXATION
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FREE AGREEMENTS AND CONTRACTS FORMATS
FREE LLB LAW NOTES
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FREE LLB LAW FIRST SEM NOTES
FREE LLB LAW SECOND SEM NOTES
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KANOON KE RAKHWALE INDIA
HIRE LAWYER ONLINE
LAW FIRMS IN DELHI
CA FIRM DELHI
VISIT : https://www.kanoonkerakhwale.com/
VISIT : https://hirelawyeronline.com/
The term estoppel is said to have been derived from the French term 'estoup' which means 'shut the mouth'.
The doctrine of estoppel is a rule of evidence contained in Section 115 of the Evidence Act.
Objectives & Agenda :
Chapter XXII of the Income-tax Act, 1961 discusses various Offences under the Income-tax Act and the applicable Prosecutions for such offences. These provisions act as a tool for enabling the Income-tax Officers to effectively enforce Income-tax laws, to deter tax avoidance and evasion and to punish wilful defaulters.
Sections Covered: 275A - 280D
What is Agricultural Income ?
Section 2 (1A) of the Income tax Act,1961
Agricultural income means :
Revenue generated through rent or lease of a land in India that is used for agricultural purposes ;
Any income derived from commercial sale of produce gained from an agricultural land
Any income from farm building.
Key points to validly classify an income as “agricultural income”
Income should be from an existent piece of land in India ;
Income should be from a piece of land that is used for agricultural operations ;
Income should stem from produce achieved after cultivation of the land. Cultivation of land is a must ;
Income can be from a land that is not under the assessee’s ownership. i.e. ownership of Land is not essential.
PERSON:
Income-tax is charged in respect of the total income of the previous year of every person. Hence, it is important to know the definition of the word person. As per section 2(31),Person includes:
an Individual
a Hindu Undivided Family (HUF)
a Company
a Firm
an Association of Persons or a Body of Individuals (BOI) whether incorporated or not
a Local Authority
every Artificial, Juridical person, not falling within any of the above
Code of civil procedure 1908 reference, review, revisionDr. Vikas Khakare
This explains what is reference, review and revision. when and where it can be made. It also explains difference between reference, review and revision.
Domicile of choice is the one an individual can acquire by his own choice. And to acquire such domicile proof of abandoning his origin domicile, mental intention to reside for a long term & habitual residence & physical presence etc. are inevitable.
OBJECTIVE
Liquidator is a person appointed by a Company or a Competent authority to manage the activities of winding up of the Company. Provisions pertaining to appointment of liquidator are stipulated under Chapter XX of Companies Act, 2013. The webinar covers the aspects of appointment of liquidator, types of liquidators, powers and duties of liquidator and judicial precedents.
Income Tax Act 1961
Capital Gain, Basis of Charge, Capital Asset U/s 2(14) Income Tax Act, Transactions that do not constitute TRANSFER U/s 47, Types of Capital Assets, Computation of STCG, Computation of LTCG, Tax Exemption for Capital Gain.
LLB LAW NOTES ON LAW OF TAXATION
FREE AFFIDAVITS AND NOTICES FORMATS
FREE AGREEMENTS AND CONTRACTS FORMATS
FREE LLB LAW NOTES
FREE CA ICWA NOTES
FREE LLB LAW FIRST SEM NOTES
FREE LLB LAW SECOND SEM NOTES
FREE LLB LAW THIRD SEM NOTES
FREE LLB LAW FOURTH SEM NOTES
FREE LLB LAW FIFTH SEM NOTES
FREE LLB LAW SIXTH SEM NOTES
FREE CA ICWA FOUNDATION NOTES
FREE CA ICWA INTERMEDIATE NOTES
FREE CA ICWA FINAL NOTES
KANOON KE RAKHWALE INDIA
HIRE LAWYER ONLINE
LAW FIRMS IN DELHI
CA FIRM DELHI
VISIT : https://www.kanoonkerakhwale.com/
VISIT : https://hirelawyeronline.com/
The term estoppel is said to have been derived from the French term 'estoup' which means 'shut the mouth'.
The doctrine of estoppel is a rule of evidence contained in Section 115 of the Evidence Act.
Objectives & Agenda :
Chapter XXII of the Income-tax Act, 1961 discusses various Offences under the Income-tax Act and the applicable Prosecutions for such offences. These provisions act as a tool for enabling the Income-tax Officers to effectively enforce Income-tax laws, to deter tax avoidance and evasion and to punish wilful defaulters.
Sections Covered: 275A - 280D
What is Agricultural Income ?
Section 2 (1A) of the Income tax Act,1961
Agricultural income means :
Revenue generated through rent or lease of a land in India that is used for agricultural purposes ;
Any income derived from commercial sale of produce gained from an agricultural land
Any income from farm building.
Key points to validly classify an income as “agricultural income”
Income should be from an existent piece of land in India ;
Income should be from a piece of land that is used for agricultural operations ;
Income should stem from produce achieved after cultivation of the land. Cultivation of land is a must ;
Income can be from a land that is not under the assessee’s ownership. i.e. ownership of Land is not essential.
Agricultural income - Relevant Income Tax IssuesAmitoz Singh
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Taxability of Capital Gain on Transfer of Agricultural Landtaxguru5
"As you are aware that Capital Gain Tax is charged on transfer of Capital Assets under provisions of Section 45 to 55A of the Income Tax Act, 1961. The main ingr"
TaxGuru is a platform that provides Updates On Amendments in Income Tax, Wealth Tax, Company Law, Service Tax, RBI, Custom Duty, Corporate Law , Goods and Service Tax etc.
To know more visit https://taxguru.in/income-tax/taxability-capital-gain-transfer-agricultural-land.html
Meaning of agricultural Income, Examples, Non Agricultural Income , Is Agricultural Income taxable? Case study, Examples of Agricultural Income and Non-Agricultural Income
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Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
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Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
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1. Comprehensive Study of Agricultural Income
By CA Abhishek Murali, M.Com, FCA, ACMA, CGMA, CIMA(Lon.), CISA, DISA
Introduction
India is a country that has long been built on the sweat and toil of the farmers in Agriculture.There
exists a special place in the hearts of almost every Indian for the word farmer. Owing to this, public
discourse of taxation of this income is anathema to the law-makers. India has not taxed agriculture
since the countrygot independence fromBritishrule in1947, and taxingfarmersheavilywasalways
seen as the trademark of colonial oppression. At that time, Indian politicians, all of whom were
associated with the freedom struggle, made a conscious decision not to tax agricultural income.
Hence, Agricultural Income has increasingly been used as a tool to plan taxes by Assessees.
Definition of Agricultural Income as per the Income Tax Act, 1961
As per S.2(1A) of the Income Tax Act, 1961, unless the context otherwise requires, the term
“agricultural income” means:
a) any rent or revenue derived from land which is situated in India and is used for agricultural
purposes;
b) any income derived from such land by—
i. agriculture; or
ii. the performance by a cultivator or receiver of rent-in-kind of any process ordinarily
employed by a cultivator or receiver of rent-in-kindto render the produce raised or
received by him fit to be taken to market; or
iii. the sale bya cultivatororreceiverof rent-in-kindof the produce raisedorreceivedby
him,in respectof whichno process has beenperformedotherthana processof the
nature described in paragraph (ii) of this sub-clause;
c) any income derived from any building owned and occupied by the receiver of the rent or
revenue of anysuch land,or occupiedbythe cultivatororthe receiverof rent-in-kind,of any
landwithrespecttowhich,orthe produce of which,anyprocessmentionedinparagraphs(ii)
and (iii) of sub-clause (b) is carried on
Provided that—
i) the buildingisonor inthe immediate vicinityof the land,and isa buildingwhichthe
receiver of the rent or revenue or the cultivator, or the receiver of rent-in-kind, by
reason of his connection with the land, requires as a dwelling house, or as a store-
house, or other out-building, and
ii) the landiseitherassessedtolandrevenueinIndiaorissubjecttoalocal rate assessed
and collected by officers of the Government as such or where the land is not so
assessed to land revenue or subject to a local rate, it is not situated-
2. a. in any area whichis comprisedwithinthe jurisdictionof a municipality(whether
known as a municipality, municipal corporation, notified area committee, town
area committee,towncommittee orbyany othername) or a cantonmentboard
and which has a population of not less than ten thousand; or
b. in any area within the distance, measured aerially:
i. not being more than two kilometres, from the local limits of any
municipalityorcantonmentboardreferredtoinitem(A)andwhichhasa
population of more than ten thousand but not exceeding one lakh; or
ii. not being more than six kilometres, from the local limits of any
municipalityorcantonmentboardreferredtoinitem(A)andwhichhasa
population of more than one lakh but not exceeding ten lakh; or
iii. not being more than eight kilometres, from the local limits of any
municipalityorcantonmentboardreferredtoinitem(A)andwhichhasa
population of more than ten lakh
Explanations:
1. Revenue derivedfromlandshall notincludeandshall be deemednevertohaveincludedanyincome
arisingfromthe transferof any landreferredtoinitem(a) or item(b) of sub-clause (iii) of clause (14)
of this section.
2. Income derivedfromanybuildingorlandreferredto insub-clause (c) arisingfromthe use of such
building or land for any purpose (including letting for residential purpose or for the purpose of any
business or profession) other than agriculture falling under sub-clause (a) or sub-clause (b) shall not
be agricultural income.
3. For the purposes of this clause,any income derivedfrom saplings or seedlingsgrown in a nursery
shall be deemed to be agricultural income.
4. For the purposesof clause (ii) of the provisoto sub-clause (c),“population”meansthe population
according to the last precedingcensusof whichthe relevantfigureshave beenpublishedbeforethe
first day of the previous year.
Summary of above:
As per Income Tax Act income earnedfrom any of the undergiventhree sourcesmeant Agricultural
Income;
i) Any rent received from land which is used for agricultural purpose
Assessees do not have to pay tax on rent or revenue from agricultural land. Such land
should,of course,be assessedtolandrevenue inthe countryorbe subjecttoalocal rate.
3. Further, there must be a direct link between the agricultural land and the receipt of
income by way of rent or other revenue (for instance, a landlord could receive revenue
from a tenant).
ii) Income from agricultural operations
Any income derived from such land by agricultural operations including processing of
agricultural produce,raisedorreceivedasrentinkindsoastorenderitfitforthe market,
or sale of such produce.
iii) Income attributable to a farm house:
Subject to the condition that building is situated on or in the immediate vicinity of the
land and is used as a dwelling house, store house etc. Income from such farm houses is
considered agricultural income. The definition of `farm houses’ covers buildings owned
and occupied by both cultivators of agricultural land and assessees who receive rent or
revenue fromagriculturalland.The solepurpose of suchfarmhousesshouldbe foruse as
dwellings for the cultivators or use as store houses. Normally, the annual value of a
buildingistaxableas`income fromhouse property’.However,inthe case of afarmhouse,
the annual value wouldbe deemedagricultural incomeandwould,thus,be exemptfrom
tax.
iv) Income from Nursery Operations
Income earnedfromcarryingnurseryoperationsisalsoconsideredasagricultural income
and hence exempt from income tax
Prerequisites of Agricultural Income:
i) There must be a land
ii) The land must be used for agricultural purposes
iii) There must be land cultivation:
Some measure of cultivation is necessary for land to have been used for agricultural
purposes. The ambit of agriculture covers all land produce like grain, fruits, tea, coffee,
spices, commercial crops, plantations, groves, and grasslands.
However, the breeding of livestock, aqua culture,dairy farming,and poultry farmingon
agricultural land cannot be construed as agricultural operations
iv) If rental income is received,thensome agricultural activitiesmustbe undertakenonthe
land, for rent to be exempt from income tax
v) Ownership is not essential:
In the case of rentor revenue,itisessentialthatthe Assesseehave aninterestinthe
land.However, inthe case of agricultural operationsitisn’tnecessarythatthe person
conductingthe operationsbe the ownerof the land.He couldbe just a tenantor a sub-
tenant.Inotherwords,all tillersof landare agriculturistsandenjoyexemptionfromtax
4. However, where a person just sellsprocessed produce without actually carrying out any agricultural
or processing operations, the income would not be regarded as agricultural income.
Likewise, in cases where the produce is subjected to substantial processing that changes the very
character of the product(forinstance,canningof fruits),the entireoperationscannotbe regardedas
agricultural operations. The profit from the sale of such processed products would have to be
apportioned between agricultural income and businessincome. Further, the income fromtrees that
have been cut and sold as timber is not considered agricultural income since there is no active
involvement in operations like cultivation and soil treatment
Section10(1) of the Income Tax Act specifiesthatagricultural income earnedbya taxpayerinIndiais
exempt from tax.
Taxability of Agricultural Income after amendment in Finance Act, 2014
Agricultural income is considered for rate purposes while computing the income tax liability, if
following two conditions are cumulatively satisfied:
1. Net Agricultural income exceeds Rs. 5,000/- for previous year; and
2. Total income, excluding net Agricultural income, exceeds the basic exemption limit
However,if aggregate agriculturalincomeof the assesseeisuptoRs.5,000/- duringFY2015, thenthe
entire income shall be exempt from tax.
Once the above conditions are satisfied, the following steps should be followed:
Step 1: Calculate tax including agricultural income earned, without exempting the same
Step 2: Addagricultural income earnedtothe applicable slablimit andcalculate tax on the same.Eg:
If the applicable slab limit to you is Rs.250,000 (<60 years age), then you will add your agricultural
income to Rs.250,000 and calculate the tax applicable on the same
Step 3: Tax payable in Step 1 minus Tax payable in Step 2
The amount as per Step 3 will be the tax that is payable, subject to deductions and cess.
Will sale of Agricultural Land be subject to Capital Gains Tax?
Prior to 1970, profit on the sale or transfer of all agricultural land was considered rent or revenue
derived from the land. Such profit was, therefore, tax-exempt as agricultural income. There were
several favourable judgments of various Courts, across the country on the issue. However, noticing
there exists a loophole
5. However, in1970, vide aretrospectiveamendment,the definitionof agriculturallandwaschanged.A
land qualifies to be agricultural land if it is not situated in any area which is comprised within the
jurisdictionof amunicipalityoracantonmentboard,andwhichdoesnothave a populationof 10,000
or more according to the last preceding census which has been published before the 1st day of the
previousyearinwhichthe saleof landtakesplace,anditisnotsituatedlessthan 8KMs fromthe local
limits of any municipality or board.
In short, the land has to be situated:
a) In a jurisdiction with a population of 10,000 people or lesser
b) Atleast 8 KMs away from the limits of a municipality or cantonment board
If,bythe testabove,the landisagricultural land,itwill notformpartof the definitionof acapital asset
and so there will be no capital gains on the sale of such land.
The Finance Act,2000 insertedanewExplanationinSection2(1A) toclarifythatanyincomefromsuch
building or land arising from the use of the building or land for any purpose other than agriculture,
would not be included in the definition of “agricultural income”. Eg: Letting out building for rental
income or for purposes of business, then it will not be considered to be agricultural income
Important Case Laws:
Bacha F. Guzdar v. C.I.T., Bombay (1955 AIR 740)
The Appellant,Bacha,wasashareholderin2companieswhowereengagedinthebusinessof growing
and manufacturingtea.Theyreceiveddividendsfromthe above companieswhichwasbroughttotax
by the Income Tax. The appellant claimed that the dividendsreceivedare eligible to a beneficial tax
rates under the Income Tax Act, 1922; as growing of tea is agricultural income.
However,the SupremeCourtheldthat Agriculturalincomeasdefinedinthe Actisobviouslyintended
to refer to the revenue received by direct association with the land which is used for agricultural
purposesandnotbyindirectlyextendingittocaseswherethatrevenue orpartthereofchangeshands
either by way of distribution of dividends or otherwise.
In fact, the dividend is derived from the investment made in the shares of the company and the
foundation of it rests on the contractual relations between the company and the shareholder.
Dividendisnotderivedbyashareholderbyhisdirectrelationshipwiththe land.Therefore whosoever
receives profit from the land directly is entitled to the exemption.
6. A shareholder does not receive profit directly from land, though the company may be involved in
agricultural activities and is not entitled for exemption
Is Horticulture Also Agriculture? - CIT vs Raja Benoy Kumar Sahas Roy (1957) 32 ITR 466 (SC)
In this case the court emphasized that certain basic operations should be carried out alongwith
subsequentoperations.The SupremeCourtobservedthatif the integratedactivityof theagriculturist,
viz., agriculture, which includes the basic operations and the subsequent operations, is undertaken
andperformedinregardtoanyland,thatlandcanbe saidtohave beenusedforagriculturalpurposes
and the income derived therefrom can be said to be agricultural income derived from the land by
agriculture. In the very same judgment, the Supreme Court also considered the other activities in
relation to the land or having connection with the land including breeding and rearing of live-stock,
dairy-farming, butter and cheese-making, poultry-farming, etc.
A reference was made to CIT - Madras vs Sundara Mudaliar (AIR 1950 Mad 566), where Hon’ble
V.Sastri observed
“Pasture land used for the feeding and rearing of live-stock is land used for agricultural purposes:
Emperorv.AlexanderAllen.Rearing of live-stocksuch ascows,buffaloes,sheep and poultry isincluded
in 'husbandry'.Theseanimalsareconsidered to betheproductsof thesoil,justlikecrops,roots,flowers
and trees, for they live on the land and derive their sustenancefromthe soil and its produce:Glanely
v. Wightman;Commissionerof Income-tax,Burma v.KokineDairy Co.It is not thereforelegitimate,in
my opinion,to confinetheword 'agriculture'to thecultivationof anopenfield with annualorperiodical
crops like wheat,rice, ragi, cotton,tobacco,jute,etc. Casuarina isusually raised on dry lands of poor
quality, and it is usual to find the same land used alternatively for the cultivation of ordinary cereal
crops like groundnut, gingelly, cholam, kambu,etc. and for the raising of casuarina plantations.The
land bears the dry assessment whatever be the nature of the crop raised”
This enlarged connotation of the term "agriculture" has been tinged by the dictionary meanings
ascribedtoitinMurray'sOxfordDictionaryandWebster'sDictionaryquotedabove whichunderstood
the term as including the allied pursuits of rearing, feeding and management of live-stock and also
including husbandry, farming, horticulture, etc., in the widest sense, as also butter, cheese-making,
etc. We shall have to considerat the appropriate stage as to how far such enlargementiswarranted
by the definition of "agricultural income" as given in section 2(1)(a) of the Indian Income-tax Act.
The casesabove notedall of theminvolve some expenditure of humanskill andlaboureitheronthe
land or the produce of the land, for without such expenditure there would be no question of the
income derived from such land being agricultural income.
Though the above decision did not decide on the matter of horticulture being agriculture, the
observation of the Hon’ble Supreme Court gives veracity to the argument itself.
7. In CIT vs Soundarya Nursery (2000 241 ITR 530 Mad), the question was raised whether the income
from sale of plants grown directly in the pots and the sale of seeds, can be treated as agricultural
income within the meaning of Section 2(1) of the Income-tax Act, 1961. The Tribunal had held that,
since the plantswere notgrowninthe potsdirectly,buttheyare,afterseveraloperationscarriedout
in the land, viz., cutting, gootying and inarching for the plants, transplanted in suitable containers,
includingpotsandkeptinthe greenhouseorinshade,andthe treesweregrownonthe landdirectly.
Significantcontributionof humanlabourandenergyis essential todothe same and therefore,itwill
be considered to be an agricultural activity.
The Madras HighCourt referredtothe case of Raja Benoy Kumar and statedthat all the products of
the land,whichhave some utilityeitherforconsumptionorfortrade or commerce,if theyare based
on land, would be agricultural products. Here, it is not the case of the Revenue that without
performingthe basicoperations,onlythe subsequentoperations,as describedinthe decisionof the
apex court have beenperformedbythe assessee.If the plantssoldby the assessee inpotswere the
resultof the basic operationsonthe landon expendinghumanskillandlabourthereonandit is only
after the performance of the basic operationson the land, the resultantproduct grown or such part
thereof as was suitable for being nurturedin a pot, was separated and placed ina pot and nurtured
with water and by placing them in the green house or in shade and after performing several
operations,suchasweeding,watering,manuring,etc.,theyare made readyforsale asplantsallthese
questions would be agricultural operations all this involves human skill and effort. Thus, the plants
sold by the assessee in pots were the result of primary as well as subsequent operations
comprehended within the term "agriculture" and they are clearly the products of agriculture.
The High Court furtherstatedthat it is not possible forthe seedstoexistwithoutthe motherplants,
andthe motherplant,itisnobody'scase,wasnotgrownonland.Itisalsonotthe case of the Revenue
that the seedswere the resultof the wildgrowth and not on account of cultivationbythe assessee.
The seeds were clearlya product of agriculture and the income derivedfrom the sale of seeds, was
agricultural income.
In KarraJayabhyarathi,Vedayapalem,Nellore-4vsIncomeTaxOfficer,Ward-Ii,Nellore(2005-TIOL-
205-ITAT-HYD), the Hon’ble singlememberbenchof Hyderabadheldthat Income derivedfromfishing
overland coveredbywater and whichis not usedfor any agricultural purposescannotbe treatedas
income from agricultures inasmuch as fish cannot be treatedas the produce of the land. The bench
also placed reliance on decisions which stated that the word ‘agriculture’ even in its widest import,
has receivedsome sortof definiteandrestrictedmeaning,andIfinditdifficulttobringfisheryunder
the heading ‘agriculture’ even in its widest sense as ordinarily understood.
Therefore, income derived from fishing over land covered by water and which is not used for any
agricultural purposes cannot be treated as income from agricultural inasmuch as fish cannot be
8. treated as the produce of the land, since their element is water and therefore, their cultivation and
welfare depend in no sense upon agriculture.
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