Agri or business
This query is : Resolved
25 August 2012
Hi..
Type of Business:
Purchasing coconut shell from farmers as raw material and converting it to charcoal manually without using any machinery and distributing it to various cities only domestic.
My queries :
1. Whether it comes under Agricultural Income or Business Income?
2. Whether TN VAT is applicable for this Charcoal?
3. Two members are jointly doing this business.. whether partnership firm or pvt ltd company to be formed?
Type of Business:
Purchasing coconut shell from farmers as raw material and converting it to charcoal manually without using any machinery and distributing it to various cities only domestic.
My queries :
1. Whether it comes under Agricultural Income or Business Income?
2. Whether TN VAT is applicable for this Charcoal?
3. Two members are jointly doing this business.. whether partnership firm or pvt ltd company to be formed?
25 August 2012
1. Business income.
2. Left open since not familiar with TNVAT.
3. Partnership will suffice.
2. Left open since not familiar with TNVAT.
3. Partnership will suffice.
Guest
Guest
(Expert)
25 August 2012
See,any income derived from land situated in India and is used for agricultural purposes including processing of the agricultural produce,raised or received as rent in kind so as to render it fit for the market or sale of such produce is an agricultural activity as per sec.2(1A) of Income Tax Act,1961....
Here,purchase of coconut shells and converting it to raw materials and selling it and deriving income therefrom can be accounted as agricultural income......
Here,purchase of coconut shells and converting it to raw materials and selling it and deriving income therefrom can be accounted as agricultural income......
28 August 2012
actually this is my confusion.. and i m again confused with same matter with both of ur answers... Give me exact solution and reason pls...
30 August 2012
None of the normal activities of agriculture were undertaken by the assessee. Therefore, income from the said transaction is business income. Karnataka high court decision in Namdhari Seeds p Ltd's case (341 ITR 342) may be referred to though not delivered on identical grounds.
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