NAMDHARI SEEDS PVT. LTD., 119, 9TH MAIN, ARASAPPA COMPLEX IDEAL HOMES TOWNSHIP RAJARAJESHWARI NAGAR BANGALORE REPRESENTED BY ITS MANAGING DIRECTOR SRI. UDAY SINGH S/O SRI. MAHARAJ BIR SINGH Vs. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 12(1)

JUDGEMENT

(1.) ITA 75/2007 and ITA 284/2007 arise out of common order dated 14.7.2006 passed by the Tribunal in ITA No. 3102/Bang/2004. Before the Tribunal, alongwith ITA No. 3102/Bang/2004, ITA No. 1040/Bang/2002 pertaining to M/s Indo American Exports came to be disposed of. ITA No. 3102/Bang/2004 pertains to the assessment year 2001 -02 in respect of an assessee by name M/s Namdhari Seeds Private Limited.

(2.) SO far as ITA 76/2007, the assessee - M/s Indo American Exports filed return of income claiming the entire amount as agricultural income seeking exemption under Section -10(1) of the Income Tax Act ('Act' for short) for the assessment year 1998 -99. The Assessing Officer holding that the entire amount of profit was liable to tax under the provisions of the Act, denied the claim of the assessee that the entire income was agricultural income. An appeal came to be filed before the first appellate authority and the first appellate authority set aside the order of assessment and held that the entire income should be treated as agricultural income giving exemption under Section -10(1) of the Act. As against this, the Revenue went up in appeal before the Tribunal. The Tribunal opined that 10% of the net profit should be treated as business income and the balance 90% of the net profit as agricultural income exempting the same from tax.

(3.) AGGRIEVED by the order of assessment, an appeal came to be filed before the Commissioner of Income -Tax (Appeals), who by his order dated 11.8.2004 allowed the claim of the assessee holding that abovestated income of Rs. 3,84,13,288/ - as agricultural income and accordingly exempted the same under Section -10(1) of the Act. So far as treating the income from agriculture in respect of lands situated outside the State of Karnataka by the Assessing Officer, Revenue had not filed any appeal. It contested the appeal filed by the assessee before the first appellate authority.