Activity of Growing and laying of turf grass at a stadium is agricultral activity resulting in Agricultural Income?
HORTUS CONSULTANTS (P) LTD. vs. INCOME TAX OFFICER ITAT, HYDERABAD ‘B’ BENCH
Agricultural income—Agricultural activity—Growing and laying of turf grass at a stadium—For calling any activity as agricultural activity, the basic and foremost requirement is that the area on which the assessee is carrying on the activity must be agricultural land—Assessee undertook a contract for re-laying of a stadium with turf grass for the Commonwealth Games (CWG)—It entered into a lease agreement for acquiring agricultural land for carrying on agricultural activity thereon—Assessee has filed photos showing that it has tilled and levelled the land with tractors—As seen from the bills produced by the assessee’s counsel as additional evidence, assessee has purchased plastic net from STS Ltd., for use of the same in growing of the grass—It appears that the mesh is used to hold the grass together as it is to be used for field and athletic events—Invoices placed on record in the additional evidence show that the assessee has purchased as much as 1,65,903 sft. of grass carpet from various suppliers—However there is no bill for any purchase of the seeds nor is there any bill for fertilizers and chemicals—Additional evidence filed by the assessee also shows that the assessee has incurred certain expenditure for preparation of seeds—Thus, it appears that the assessee has done some activity for growing grass from seeds in the fields other than sourcing the grass carpet from various other nurseries—Grass which has been grown and harvested by the assessee is from the agricultural land taken on lease by the assessee and its growth and harvesting has been supervised and inspected by the officials of the CWG team—Therefore, the activity carried on by the assessee, till the grass is grown and removed from the soil can be considered as the agricultural activity—Subsequent activity of transporting the grass and re-laying it at the fields and maintaining the same till the closure of the CWG cannot be said to be an activity integrated with the agricultural activity. It clearly is an activity of service—Since the additional evidence was not filed before the authorities below, same is admitted and remanded to the AO for verification of the authenticity of the said documents and for computation of agricultural income—If it is found that these documents are genuine, then the aforesaid finding stand—If it is otherwise, the AO is free to take a decision on the basis of only such documents which are found to be genuine—Assessee is directed to furnish bifurcation of its income from the agricultural activity and non-agricultural activity before the AO on the basis of the said finding that activity upto harvesting is agricultural activity
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