Agricultural activity on leased land: Whether Agricultural Income or not?

Agricultural activity on leased land: Whether Agricultural Income or not?

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Agricultural activity on leased land:

Whether Agricultural Income or not?

Taxation of agricultural income has always been an issue of interest as well litigation. Whether agricultural activity on leased land be considered as an agricultural income exempt from Income Tax?
It may be noted that this question is covered by the ITAT judgement in the case of [Wilson & Co. Ltd. v. ACIT (2009) 184 Taxman 79: 121 TTJ 258: (2008) 16 DTR 428 (ITAT Chennai)] 
It was held that Income generated from tea plantations taken on lease, cannot cease to be an Agricultural Income merely on the ground that basic operations had already been carried out in agricultural land by the lessor.
In this particular case, it was also held that cultivation charges and harvesting charges incurred by assessee along with other basic operations cannot be said as towards secondary operation, so as to treat the income as Non-agricultural Income.
In short, whether the land is an owned land or a leased land, the income would remain an agricultural land.
It may further be noted that even if the agricultural activity is carried out by partnership firms then also the agricultural activity would qualify for exemption even though it is carried out with an aim to earn business profit.
Section 10 Income has an overriding effect over all other income.

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