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Tax Publishers Test for Agricultural income - Whether lands are to be owned by the assessee *Facts:* Assessee company was in the business of agrochemicals and manufacturing genetically modified seeds. They had tied up with various farmers for trying out genetically modified corn in AP and Karnataka. The income from the same was claimed as agricultural income and exempt under section 10(1). The case of the assessee has gone many rounds in the earlier asst. years as well on the same topic of agricultural income. Alleging new facts revenue claimed that the assessee was not the owner of the lands, nor were they performing agricultural operations thus the income was held to be taxable by both the AO and the CIT(A). On higher appeal - Held in favour of the assessee that they were indeed earning agricultural income and no where in the act it warrants that the assessee needs to own lands. Even passive agricultural income earning through leasing of lands or land revenue by way of leasing agricultural land is also agricultural income. The case of the revenue was under appeal before the Apex court on this same point. That does not mean that the benefit should not be conferred on the assessee - thus held the ITAT. The decision of Namdhari seeds case though reversed by the Karnataka high court cannot be read into the assessee's case. In this Namdhari's case the departmental plea before Kar HC was that the assessee had entered into "smart" agreements with farmers to claim benefit of agricultural income. In the case of the assessee also it was thus similar so the benefit of agricultural income claim was to be negated thus canvassed revenue. *Applied:* Raja Benoy Kumar Sahas Roy in (1957) 32 ITR 466 (SC) : 1957 TaxPub(DT) 0152 (SC) Maddi Venkatasubbayya in (1951) 20 ITR 151 (Mad-HC) : 1951 TaxPub(DT) 0095 (Mad-HC) Associated Metal Co in (1989) 177 ITR 428 (All) : 1989 TaxPub(DT) 0890 (All-HC) Indo American Exports in [ITA No. 1040/Bang/2002] Namdhari Seeds Pvt. Ltd. in [ITA No.3102/Bang/2004] CIT v. M/s Monsanto India Ltd. [ITA No.633 of 2010, dt. 5-8-2011] *Case:* Bayer Crop Science Ltd. v. Dy. CIT 2023 TaxPub(DT) 7100 (Mum-Trib)

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Test for Agricultural income - Whether lands are to be owned by the assessee

Facts:

Assessee company was in the business of agrochemicals and manufacturing genetically modified seeds. They had tied up with various farmers for trying out genetically modified corn in AP and Karnataka. The income from the same was claimed as agricultural income and exempt under section 10(1). The case of the assessee has gone many rounds in the earlier asst. years as well on the same topic of agricultural income. Alleging new facts revenue claimed that the assessee was not the owner of the lands, nor were they performing agricultural operations thus the income was held to be taxable by both the AO and the CIT(A). On higher appeal -

Held in favour of the assessee that they were indeed earning agricultural income and no where in the act it warrants that the assessee needs to own lands. Even passive agricultural income earning through leasing of lands or land revenue by way of leasing agricultural land is also agricultural income. The case of the revenue was under appeal before the Apex court on this same point. That does not mean that the benefit should not be conferred on the assessee - thus held the ITAT. The decision of Namdhari seeds case though reversed by the Karnataka high court cannot be read into the assessee's case. In this Namdhari's case the departmental plea before Kar HC was that the assessee had entered into "smart" agreements with farmers to claim benefit of agricultural income. In the case of the assessee also it was thus similar so the benefit of agricultural income claim was to be negated thus canvassed revenue.

Applied:

Raja Benoy Kumar Sahas Roy in (1957) 32 ITR 466 (SC) : 1957 TaxPub(DT) 0152 (SC)

Maddi Venkatasubbayya in (1951) 20 ITR 151 (Mad-HC) : 1951 TaxPub(DT) 0095 (Mad-HC)

Associated Metal Co in (1989) 177 ITR 428 (All) : 1989 TaxPub(DT) 0890 (All-HC)

Indo American Exports in [ITA No. 1040/Bang/2002]

Namdhari Seeds Pvt. Ltd. in [ITA No.3102/Bang/2004]

CIT v. M/s Monsanto India Ltd. [ITA No.633 of 2010, dt. 5-8-2011]

Case: Bayer Crop Science Ltd. v. Dy. CIT 2023 TaxPub(DT) 7100 (Mum-Trib)