Priyanka.S (Articled Student) (168 Points)
09 May 2017
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160886 Points)
Replied 09 May 2017
Profits-from-sale-of-jaggery-is-not-an-agricultural-income- ITAT Delhi said in its order dated March 18, 2008
“Profit from the sale of jaggery falls beyond the ken of agriculture income,” the Chennai bench of the Income Tax Appellate Tribunal (ITAT) said, adding there is no nexus between jaggery and agricultural operations. -
A.Venkata Ramana
(chartered accountant)
(29 Points)
Replied 09 May 2017
The farmer gets sale proceeds from sale tof jaggery which is direcctly produced from his own produce of sugarcane.If he purchases sugarcane and convert the same as jaggery it is a business income otherwise it should be agricultural income
I agree with Mr Rambhia.
Agricultural income includes Income by the performance of any process to render the produce fit to be marketed.
So, sugar cane sold in the raw form is agricultural income; while the products brought out from it by way of jaggery or sugar/candy would be business income.
When there was no market for the sugarcane produced by the assessee in its natural condition, income received by the assessee from sale of jaggery was exempt from tax as agricultural income. CIT v H.G. Date [1971] 82 ITR 71 (Bom.).
If the sugarcane is ordinarily saleable in the market without any other subsequent process, the process of converting it into jaggery or sugar will not be a process to render the produce fit to be taken to the market.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(160886 Points)
Replied 09 May 2017
Agree with CA Madhavi Pandit, but in such scenario, AO considers both income separately, and assessess only the second part as business income!
CAclubindia
