srinivasa Reddy.B (DT. MANAGER ACCOUNTS) (47 Points)
19 October 2008Can a company claim exemption of income form production, manufacturing and sales of seeds saying that the income from such business is Agricultural income, so it is exempted income from Income tax?
If the company can do that who can it is prove to the Income tax department that the income for sale of seeds is Agriciltural Income ?
CA Chaitanya
(PRACTISING CA)
(4283 Points)
Replied 19 October 2008
In order to claim it as agricultural income the following conditions must be satisfied.
1.It must be derived from a land situated in India.
2.It must be derived by performing basic agricultural operations and subsequent operations.
Ramakrishna
(Financial Executive)
(438 Points)
Replied 27 October 2008
Dear Friends!
What will be the nature of income received from 'nursery' operations alone? Nursery operations do not require putting the seeds to the land and watching them grow. Often, the seedlings are allowed to grow in polythene pockets and all that is enough is to provide some space for keeping the saplings even in the penthouse of a 24 storied apartment. Is it agricultural income?
Do post your response!
Good Bye! Cheers!!
srinivasa Reddy.B
(DT. MANAGER ACCOUNTS)
(47 Points)
Replied 30 October 2008
nature of income received is not only 'nursery' operations but also from Agricultural operations also.
Ramakrishna
(Financial Executive)
(438 Points)
Replied 02 April 2009
Dear Srinivasa reddy!
But by the amendment made to Section 2(1A) brought into force with effect from 01.04.2009, by the Finance Act, 2008, income derived from saplings or seedlings grown in a nursery is termed to agricultural income.
Interesting indeed!
Good Bye! Cheers!!
CAclubindia
