Tribunal held that the actual cultivation on the land like tilling, sowing, etc. was being done by the farmers and that the farmers are not the employees of the assessee company. Tribunal held that therefore, mere supervision by the assessee without the carrying of the basic operations would leave no manner of doubt that no agricultural income arose in the hands of the assessee. The argument of the assessee that the company is an artificial person and could not have conducted the agricultural operations by itself and, therefore, required such kind of an arrangement with the farmers for earning agricultural income was rejected by the Tribunal . The Tribunal also observed that had it been the case where the actual agricultural operations were carried out by the employees of the assessee company, it would have been a different case altogether. Accordingly, the appeal of the Assessee was dismissed by the Tribunal and claim of exemption u/s 10(1) was rejected.
P.H.I. Seeds Pvt. Ltd. v. DCIT ( 2018) 165 DTR 129 /192 TTJ 412(Delhi)( Trib)
S.28(i): Business income- Agricultural income – Where the agricultural activities were carried out by the farmers mere supervision by the Assessee without carrying basic operation would not qualify as agricultural activities and accordingly income of the Assessee from processing, packing and sale of various seeds procured from farmers was liable to be treated as business income and not agricultural income [ S.10(1) ]