Nadeem Mohd. Abdul v. ITO [ITA No. 25/Hyd/2020, dt. 28-1-2021] : 2021 TaxPub(DT) 578 (Hyd-Trib)

Income from agriculture -- Rental income from lease of land for agricultural operations

Facts:

Assessee returned substantial agricultural income which on scrutiny under section 143(2) revealed that he had leased large tract of lands and leased these to a company called Adisa Agro Pvt. Ltd. who were into commercial farming of aromatic and medicinal plants. It was thus alleged by the assessing officer and by the Commissioner (Appeals) that the income was not agricultural income per se and it ought to have been assessed as income from other sources. On further appeal by the assessee --

Held in favour of the assessee that the definition of agricultural income under section 2(1A) covers any rent or revenue derived by land which is situated in India and used for agricultural purposes. The assessee need not carry on the agricultural activity or operations by himself in the first place. Even passive income from renting for agriculture is agricultural income. The order of the Commissioner (Appeals) upholding that it was income from other sources deserves to be dismissed.