KARRA JAYABHYARATHI v. INCOME TAX OFFICER
[Citation -2005-LL-0531]

Citation 2005-LL-0531
Appellant Name KARRA JAYABHYARATHI
Respondent Name INCOME TAX OFFICER
Court ITAT
Relevant Act Income-tax
Date of Order 31/05/2005
Assessment Year 2002-03
Judgment View Judgment
Keyword Tags agricultural produce • agricultural purpose • agricultural income • use of land • tea estate
Bot Summary: During the previous year relevant to the year under consideration, the assessee earned income from prawn culture, and the same was claimed as agricultural income and exempt from tax. The learned counsel appearing on behalf of the assessee kly submitted that the income earned by the assessee satisfies the conditions laid down under s. 2(1A) of the Act inasmuch as the assessee has used the agricultural lands, conducted basic operations, such as digging the land, watering the land, sowing the seeds and obtained yield from out of such basic operations, and thus, it has to be treated as agricultural income. The learned counsel also placed reliance upon the definition given in the Agricultural Produce Act, 1937 with regard to the term agricultural produce. 2(1A)(a) defines agricultural income as any rent or revenue derived from land, which is situated in India and is used for agricultural purposes. Identical issue has come up before the Hon ble Madras High Court in the year 1932, wherein Bench observed that income derived from the fisheries is not exempt from the assessment from income-tax, since it cannot be treated as agricultural income. Chief Justice Beasley referred to the Hon ble Calcutta High Court judgment in the case of Emperor vs. Probhat Chandra Barua 1 ITC 284 and the Hon ble Patna High Court judgment in the case of Maharajadhiraj of Darbhanga vs. CIT ILR 3 Pat 470 and quoted with approval the aforesaid judgments to hold that the income from fisheries cannot be treated as agricultural income. In view of the above, income derived from fishing over land covered by water and which is not used for any agricultural purpose cannot be treated as income from agriculture inasmuch as fish cannot be treated as the produce of the land, since their element is water and their cultivation and welfare depend in no sense upon agriculture.


D. MANMOHAN, J.M.: This appeal by assessee is directed against order dt. 14th Nov., 2003 passed by CIT(A), Guntur, and it pertains to asst. yr. 2002-03. During previous year relevant to year under consideration, assessee earned income from prawn culture, and same was claimed as agricultural income and, therefore, exempt from tax. AO as well as learned CIT(A) rejected contention of assessee, and thus, assessee is in appeal before Tribunal. learned counsel appearing on behalf of assessee kly submitted that income earned by assessee satisfies conditions laid down under s . 2(1A) of Act inasmuch as assessee has used agricultural lands, conducted basic operations, such as digging land, watering land, sowing seeds (prawn seeds) and obtained yield from out of such basic operations, and thus, it has to be treated as agricultural income. In this regard, he relied upon definition of "agricultural produce" given under Agricultural Produce Act, 1937. He has also relied upon decisions purported to have been in Karimtharuvi Tea Estate Ltd. vs. State of Kerala (1966) 60 ITR 262 (SC) and 120 ITR 621 (sic). On other hand, learned Departmental Representative relied upon t h e orders of tax authorities, and contended that growing prawns has different nomenclature, which is known as prawn culture, which is different from agriculture, and thus, it would not fall within definition of agricultural income under s. 2(1A) of Act. I have carefully considered rival submissions and perused records. learned counsel mentioned in written submissions that he is relying upon decision in 120 ITR 621 (sic) whereas it is noticed that there is no such case- law relevant to issue on hand on such page number. Similarly, Karimtharuvi Tea Estate Ltd. s case (supra) is on issue of levy of agricultural income-tax and it has no bearing on issue involved in present appeal. learned counsel also placed reliance upon definition given in Agricultural Produce Act, 1937 with regard to term agricultural produce . However, it has to be borne in mind that IT Act is separate code and thus definition given under s. 2(1A) should alone be taken into consideration for purpose of appreciating as to whether impugned income falls within definition or not. Sec. 2(1A)(a) defines agricultural income as any rent or revenue derived from land, which is situated in India and is used for agricultural purposes . Identical issue has come up before Hon ble Madras High Court in year 1932, wherein Bench observed that income derived from fisheries is not exempt from assessment from income-tax, since it cannot be treated as agricultural income. Court observed that such income cannot be treated as rent or revenue derived from land used for agricultural purposes. decision of Hon ble Madras High Court, prior to formation of separate State of Andhra Pradesh, has to be treated as decision of jurisdictional High Court, and thus, it is binding on subordinate Courts falling within jurisdiction. Thus, for historical reason, judgment of Hon ble Madras High Court in that case is binding on this Bench. Chief Justice Beasley referred to Hon ble Calcutta High Court judgment in case of Emperor vs. Probhat Chandra Barua 1 ITC 284 and Hon ble Patna High Court judgment in case of Maharajadhiraj of Darbhanga vs. CIT (1924) ILR 3 Pat 470 and quoted with approval aforesaid judgments to hold that income from fisheries cannot be treated as agricultural income. other two Judges constituting Bench have passed separate but concurring judgments. Justice Ananta Krishna Ayyar observed in CIT vs. V.T.S. Sevuga Pandia Thevar (1933) 1 ITR 78 (Mad) at p. 89 as under: "The word agriculture even in its widest import, has received some sort of definite and restricted meaning, and I find it difficult to bring fishery under heading agriculture even in its widest sense as ordinarily understood." Justice Cornish while concurring with view of Chief Justice observed that use of tank as fishery is not use of land for agricultural purpose. In view of above, income derived from fishing over land covered by water and which is not used for any agricultural purpose cannot be treated as income from agriculture inasmuch as fish cannot be treated as produce of land, since their element is water and, therefore, their cultivation and welfare depend in no sense upon agriculture. learned counsel could not show any direct decision on this aspect, contrary to view taken in case law noted above. Under circumstances, I do not find any infirmity in order of learned CIT(A), and accordingly dismiss appeal filed by assessee. In result, assessee s appeal is dismissed. *** KARRA JAYABHYARATHI v. INCOME TAX OFFICER
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