LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Business or agri income

**KK** (B.Com. MBA. Pursuing CA & CS) (255 Points)

24 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?

Reply
Follow
Share

1 Replies

Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 24 August 2012

For the purpose of considering the income agricultural income the assesse himself has to perform some basic operations & also the secondary operations whihc are a continuation of the basic operations. Baasic operations refer to to human expenditure on account of tilling the soild, sowing the seeds, irrigation etc... whihca re necessary to be performed for growing the crops. Secondary operations shud be the continuance of the basic operations such as harvesting the crops putting them into the bags etc..

In your case you are directly purchsing the coconuts shell from some other person and manufacturing charcoal from it. As the conditions explained above are not satisfied so the income shud be considered as business income & not agricultural income.

2 Like