Agriculture income
This query is : Resolved
25 October 2013
sir,
Does agriculture income earned by company is taxable for them and if yes weather dividend distributed out of this is liable for DDT ??
25 October 2013
Dear Sanjeev,
This issue was addressed by Calcutta High Court in the case of Jayshree Tea and Industries Ltd. vs Union of India (285 ITR 506). Deciding in the favor of the assessees, it was ruled that DDT being a tax on company cannot be levied on the agriculture.
In the instant case, the assessee was a tea plantation company wherein 60% income was considered agriculture income (Rule 7). It was ruled that the dividend distributed shall be divided in the proportion of 40:60. and only on the 40% of the Dividend DDT shall be applicable.
I couldn't find any forward reference to this case. So presuming that the ratio of this case is valid, you can claim 100% exemption from DDT.
But needless to say, be prepared for disallowance atleast till CIT(A) level.
This issue was addressed by Calcutta High Court in the case of Jayshree Tea and Industries Ltd. vs Union of India (285 ITR 506). Deciding in the favor of the assessees, it was ruled that DDT being a tax on company cannot be levied on the agriculture.
In the instant case, the assessee was a tea plantation company wherein 60% income was considered agriculture income (Rule 7). It was ruled that the dividend distributed shall be divided in the proportion of 40:60. and only on the 40% of the Dividend DDT shall be applicable.
I couldn't find any forward reference to this case. So presuming that the ratio of this case is valid, you can claim 100% exemption from DDT.
But needless to say, be prepared for disallowance atleast till CIT(A) level.
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