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Agriculture income or not

31 December 2018

The farmer is extracting oil from boiler fixed at agricultural land by boiling Lemon Grass ( medicinal plant).The extracted oil is selling to the cosmotic. Whether this activity is agricultural income or not?Explain the tax implications on this activity.

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7 Replies

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 31 December 2018

any things attached and growing from the land and on which manual labour is spent is termed as agricultural income as per SC ruling.
since you are lemon grass that is attached to the land and spending manual labour on it the income earned wud come under agricultural income

Vinay kumar (12 Points)
Replied 31 December 2018

Thanks for your kind reply. Can you provide the details of above SC ruling for better understanding.

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 31 December 2018

refer the case CIT v/s Raja Benoy Kumar Sahas Roy (1957) 32 ITR 466

CS M Pota (Company Secreatary) (3180 Points)
Replied 01 January 2019

If i buy Lemon grass from the market and put Boiler in the agricultural Land of other and extract oil to sale to the Cosmetic does it Agricultural Income?

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 01 January 2019

it will not constitute as agricultural income as lemon grass is not grown in one's own agricultural land and no manual labour is spent and basic operations related to agriculture are not petfomed

CS M Pota (Company Secreatary) (3180 Points)
Replied 02 January 2019

I had asked the above question because Mr. Vinay Kumar has not mentioned in his question that the farmer is extracting oil from the Lemon grass grown in his farm.

Originally posted by : Vinay kumar
	The farmer is extracting oil from boiler fixed at agricultural land by boiling Lemon Grass ( medicinal plant).The extracted oil is selling to the cosmotic. Whether this activity is agricultural income or not?Explain the tax implications on this activity.