A.G. Bioteck Laboratories (India) Ltd., R.R.Dist, R.R.Dist V. ITO, Ward-1(1), Hyd, Hyderabad

ITA 1055/HYD/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2333 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 03-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 25-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANJALA SAHU
• Assessee Lawyers: G V V S MURTY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I.T.A. NOS. 1055 & 1134/HYD/2016 ASSESSMENT YEARS: 2011-12 & 2012-13 M/S. A.G. BIOTECK LABORATORIES (INDIA) LTD., QUTBULLAPUR, RANGA REDDY DIST., [PAN: AABCA7336D] VS THE INCOME TAX OFFICER, WARD-1(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI G.V.V.S. MURTY, AR FOR REVENUE : SMT. ANJALA SAHU, DR DATE OF HEARING : 03-07-2017 DATE OF PRONOUNCEMENT : 13-07-2017 O R D E R PER V. DURGA RAO, J.M. : THESE TWO APPEALS PREFERRED BY ASSESSEE ARE DIRECTE D AGAINST THE ORDER(S) OF THE COMMISSIONER OF INCOME TAX (APPE ALS)-1, HYDERABAD, FOR THE AYS. 2011-12 & 2012-13. THE ISSU E INVOLVED IN BOTH THE APPEALS ARE COMMON. FOR THE SAKE OF CONVEN IENCE, BOTH THE APPEALS ARE HEARD TOGETHER AND DEPOSED OF BY PASSI NG THE COMMON ORDER. I.T.A. NOS. 1055 & 1134/HYD/2016 :- 2 - : 2. THE ONLY ISSUE INVOLVED IN THESE APPEALS ARE WHETH ER THE INCOME DERIVED BY ASSESSEE BY CARRYING ON TISSUE CU LTURE OPERATIONS IS AN AGRICULTURAL INCOME OR BUSINESS INC OME. LD. DR HAS SUBMITTED THAT THE ISSUE INVOLVED IN THESE APPEALS IS COVERED AGAINST THE ASSESSEE IN ASSESSEES OWN CASE FOR THE AY S. 2002-03 & 2003-04 IN ITA NOS. 1172 & 1173/HYD/2006 BY THE ORDE R DT. 28- 09-2007 AND SUBMITTED THAT THE SAME MAY BE FOLLOWED AND THE APPEALS FILED BY THE ASSESSEE MAY BE DISMISSED. 3. ON THE OTHER HAND THE LD. COUNSEL FOR ASSESSEE SUBM ITTED THAT THE ISSUE INVOLVED IN THESE APPEALS THOUGH AGAINST T HE ASSESSEE IN ASSESSEES OWN CASE, HOWEVER, IT IS COVE RED BY THE DECISION OF THE PUNE BENCH OF ITAT IN THE CASE OF K.F . BIOPLANTS PRIVATE LIMITED VS. ITO IN ITA NO. 146/PN/2008 BY OR DER DT. 26- 03-2009. 4. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORDS AND GONE TO THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE I S ENGAGED IN THE BUSINESS OF TISSUE CULTURE OPERATIONS AND CLAIMED BEFORE THE AO THAT THE INCOME RECEIVED BY ASSESSEE FROM CARRYING TISSUE CULTURE OPERATIONS IS INCOME FROM AGRICULTURE. AO TREA TED THE INCOME EARNED BY ASSESSEE AS INCOME FROM BUSINESS. ON APPEAL, CIT(A) CONFIRMED THE ORDER OF THE AO BY FOLLOWING ASS ESSEES OWN CASE FOR THE AYS. 2002-03 & 2003-04 IN ITA NOS.1172 & 1173/HYD/2006 BY THE ORDER DT. 28-09-2007, WE FIND THA T WHETHER THE INCOME RECEIVED BY ASSESSEE CARRYING THE TISSUE CU LTURE IS AGRICULTURAL INCOME OR AS ALREADY CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE AND HELD THAT IT IS A BUSINESS INC OME. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED AS UNDER: I.T.A. NOS. 1055 & 1134/HYD/2016 :- 3 - : 17. WE HAVE CONSIDERED RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE THAT ARISES FOR CONSIDERATION IS WHETHER THE INCOME GENERATED OUT O F TISSUE CULTURE OR MICRO PROPAGATION IS AGRICULTURE INCOME OR NOT. AG RICULTURAL INCOME HAS BEEN DEFINED IN THE INCOME-TAX ACT. SEC. 2(1A) REA DS AS FOLLOWS: 2. IN THIS ACT, UNLESS THE CONTEXT OTHERWISE REQUIRES , (1) 'ADVANCE TAX' MEANS THE ADVANCE TAX PAYABLE IN ACCO RDANCE WITH THE PROVISIONS OF CHAPTER XVII-C; [(1A)] 'AGRICULTURAL INCOME' MEANS- (A) ANY RENT OR REVENUE DERIVED FROM LAND WHICH IS SITUATED IN INDIA AND IS USED FOR AGRICULTURAL PURPOSES; (B) ANY INCOME DERIVED FROM SUCH LAND BY- (I) AGRICULTURE; OR (II) THE PERFORMANCE BY A CULTIVATOR OR RECEIVER OF RENT -IN- KIND OF ANY PROCESS ORDINARILY EMPLOYED BY A CULTIVATOR OR RECEIVER OF RENT-IN- KIND TO RENDER THE PRODUCE RAISED OR RECEIVED BY HI M FIT TO BE TAKEN TO MARKET; OR (III) THE SALE BY A CULTIVATOR OR RECEIVER OF RENT-IN- KIND OF THE PRODUCE RAISED OR RECEIVED BY HIM, IN RESPECT OF WHICH NO PROCESS HAS BEEN PERFORMED OTHER THAN A PROCESS OF THE NATURE DESCRIBED IN PARAGRAPH (II) OF THIS SUB-CLAUSE ; (C) ANY INCOME DERIVED FROM ANY BUILDING OWNED AND OCCU PIED BY THE RECEIVER OF THE RENT OR REVENUE OF ANY SUCH LAND, OR OCCUPIED BY THE CULTIVATOR OR THE RECEIVER OF RENT-IN- KIND, OF ANY LAND WITH RESPECT TO WHICH, OR THE PRODUCE OF WHICH, ANY PROCESS MENTION ED IN PARAGRAPHS (II) AND (III) OF SUB-CLAUSE (B) IS CARRIED ON : PROVIDED THAT- (I) THE BU ILDING IS ON OR IN THE IMMEDIATE VICINITY OF THE LA ND, AND IS A BUILDING WHICH THE RECEIVER OF THE RENT OR REV ENUE OR THE CULTIVATOR, OR THE RECEIVER OF RENT-IN- KIND, BY REASON OF HIS CONNECTION WITH THE LAND, REQUIRES AS A DWELLING HO USE, OR AS A STORE-HOUSE, OR OTHER OUT-BUILDING, AND (II) THE LAND IS EITHER ASSESSED TO LAND REVENUE IN INDI A OR IS SUBJECT TO A LOCAL RATE ASSESSED AND COLLECTED BY O FFICERS OF THE GOVERNMENT AS SUCH OR WHERE THE LAND IS NOT SO ASSE SSED TO LAND REVENUE OR SUBJECT TO A LOCAL RATE, IT IS NOT SITUATED- (A) IN ANY AREA WHICH IS COMPRISED WITHIN THE JURISDICTION OF A MUNICIPALITY (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORATION, I.T.A. NOS. 1055 & 1134/HYD/2016 :- 4 - : NOTIFIED AREA COMMITTEE, TOWN AREA COMMITTEE, TOWN COMMITTEE OR BY ANY OTHER NAME) OR A CA NTONMENT BOARD AND WHICH HAS A POPULATION OF NOT LESS THAN TEN THOUSAND ACCORDING TO THE LA ST PRECEDING CENSUS OF WHICH THE RELEVANT FIGURES HAVE BEEN PUBLISHED BEFORE THE FIRST DAY OF THE PREVIOUS YEAR; OR [(B) IN ANY AREA WITHIN SUCH DISTANCE, NOR BE ING MORE THAN EIGHT KILOMETRES, FROM THE LOCAL LIMITS OF ANY MUNICIPALITY OR CANTONMENT BOARD REFERRED TO IN ITEM (A) , AS THE CENTRAL GOVERNMENT MAY, HAVING REGARD TO THE EXTENT OF, AND SCOPE FOR, URBANIZATION OF THAT AREA AND OTHER RELEVANT CONSIDERATIONS , SPECIFY IN THIS BEHALF BY NOTIFICATION IN THE OFFICIAL GAZETTE. 1 EXPLANATION - FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED TH AT REVENUE DERIVED FROM LAND SHALL NOT INCLUDE AND SHALL BE DE EMED NEVER TO HAVE INCLUDED ANY INCOME ARISING FROM THE TRANSFER OF ANY LAND RE FERRED TO IN ITEM (A ) OR ITEM (B) OF SUB-CLAUSE (III) OF CLAUSE (14) OF THIS SECT ION. EXPLANATION 2 - FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED TH AT INCOME DERIVED FROM ANY BUILDING OR LAND REFERRED TO IN SU B-CLAUSE (C) A RISING FROM THE USE OF SUCH BUILDING OR LAND FOR ANY PURPOSE (INCLU DING LETTING FOR RESIDENTIAL PURPOSE OR FOR THE PURPOSE OF ANY BUSINESS OR PROFE SSION) OTHER THAN AGRICULTURE FALLING UNDER SUB -CLAUSE (A) OR SUB-CLAUSE (B) SHALL NOT BE AGRICULT URAL INCOME; 5. WE HAVE GONE THROUGH THE ORDER PASSED BY THE TRIBU NAL. THE TRIBUNAL HAS ALREADY CONSIDERED ALL THE ARGUMENTS RAI SED BY ASSESSEE AND PASSED A DETAILED ORDER. WE FIND THAT THE CIT(A) BY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES O WN CASE, APPEAL FILED BY THE ASSESSEE IS DISMISSED, WE FIND NO INFIR MITY IN THE ORDER PASSED BY THE CIT(A) AND THEREFORE, THESE TWO APPEAL S OF ASSESSEE ARE DISMISSED. I.T.A. NOS. 1055 & 1134/HYD/2016 :- 5 - : 6. SO FAR AS THE CASE LAW RELIED ON BY THE LD. COUNS EL FOR ASSESSEE IN THE CASE OF THE K.F. BIOPLANTS PRIVATE LIMI TED VS. ITO (SUPRA), NO APPLICATION TO THE FACTS OF THE CASE IN HAN D. 7. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH JULY, 2017 SD/- SD/- (S. RIFAUR RAHMAN) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 13 TH JULY, 2017 TNMM COPY TO : 1. M/S. A.G. BIOTECK LABORATORIES (INDIA) LTD., SY. NO. 226/A, BACHUPALLY, QUTBULLAPUR, RANGA REDDY DISTRIC T. 2. THE INCOME TAX OFFICER, WARD-1(1), HYDERABAD. 3. CIT (APPEALS)-1, HYDERABAD. 4. PR.CIT-1, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.