Orissa State Cashew Development Corporation Ltd, Bhubaneswar V. ACIT, Bhubaneswar

ITA 66/CTK/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4421 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 13-05-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 26-02-2010
• Court: TRIBUNAL
• Department Lawyers: PRAMITA TRIPATHY
• Assessee Lawyers: J M PATTANAIK
• Keywords: Business income
• Section: 10

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL,CUTTACK BENCH,CUTTACK BEFORE : HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER, AND HONBLE SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER. ITA NO. 66 AND 67/CTK/2010 (ASSESSMENT YEARS 2004 - 05 AND 2005 - 06) ORISSA STATE CASHEW DEV.CORPN.LTD., 2 ND FLOOR, F - 4 BLOCK, INDRADHANU MARKET, IRC VILLAGE, BHUBANESWAR PAN: AAACO 5722 G VERSUS ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(1 ) , BHUBANESWAR. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI J.M.PATTANAIK, AR FOR THE RESPONDE NT SMT. PRAMITA TRIPATHY, DR ORDER SHRI K.K.GUPTA, ACCOUNTANT MEMBER : THESE TWO APPEALS BY THE ASSESSEE RAISE A COMMON ISSUE FOR THE IMPUGNED AYS CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) ON THE ASSESSING OFFICER HAVING COMPUT ED AG RICULTURAL INCOME FROM THE LAND HOLDING PATTERN OF THE ASSESSEE , PARTLY EMANATING FROM AGRICULTURAL OPERATION CARRIED OUT ON THE WHOLE OF THE LAND AND PARTIALLY AS BUSINESS INCOME. A SEPARATE GROUND RELATING TO DISALLOWANCE OF PROVIDENT FUND PAID WITHIN TH E DUE DATE OF FILING OF THE RETURN IS ALSO RAISED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2004 - 05 WHEN THE LEARNED CIT(A) UPHELD THE DISALLOWANCE OF THE ASSESSING OFFICER BY QUOTING THE DUE DATE AS PROVIDED IN THE PROVISIONS OF SECTION 36(1)(VA) BEING THE CONTRIBUTION OF THE EMPLOYEES AND NOT THE EMPLOYER. 2. WE TAKE UP BOTH THE APPEALS TOGETHER FOR DISPOSAL, FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. ON THE COMMON ISSUE, THE LEARNED COUNSEL FOR THE ASSESSEE INITIATED HIS ARGUMENTS BY SUBMITTING THE BRIE F FACTS AS HAVE BEEN OBSERVED BY THE AUTHORITIES BELOW. HE SUBMITTED THAT ORISSA STATE CASHEW DEVELOPMENT 2 CORPORATION LTD. (OSCDC LTD.) WAS INCORPORATED UNDER THE COMPANIES ACT, 1956 ON 6TH APRIL, 1979 WITH THE AUTHORISED SHARE CAPITAL OF RS. 5.00 CRORE FO R DEVELOPMENT OF CASHEW IN THE STATE OF ORISSA. THE GOVT. OF ORISSA HAS SO FAR CONTRIBUTED RS. 1 .55 CRORE TOWARDS PAID UP SHARE CAPITAL. THE MAIN OBJECTIVE OF OSCDC LTD. IS TO GIVE THRUST ON DEVELOPMENT OF CASHEW PLANTATION AND STRENGTHEN THE ECONOMY OF T HE STATE BY COMMERCIALLY EXPLOITING CASHEW CROP IN THE STATE. INITIALLY, OSCDC LTD., EMBARKED UPON ITS ACTIVITIES IN THE THEN 7 NOS. OF UNDIVIDED DISTRICTS OF ORISSA. DURING ITS 32 YEARS OF EXISTENCE, THE OSCDC LTD., IS EXPANDED ITS ACTIVITIES AND IS NOW H AVING 578 NOS. OF CASHEW PLANTATIONS OVER AN AREA OF NEARLY 30.000 HECTARES UNDER 20 NOS. OF REVENUE DISTRICTS OF THE STATE. IN THE YEAR 1993 THE GOVERNMENT OF ORISSA HAS DECLARED OSCDC LTD, AS THE NODAL AGENCY FOR CASHEW CULTIVATION / EXPANSION IN THE STA TE. UNDER THE NATIONAL HORTICULTURE MISSION PROGRAMME FOR CASHEW, THE CENTRALLY SPONSORED SCHEMES, THE OSCDC LTD. HAS RAISING HIGH YIELDING VARIETY OF CASHEW GRAFTS FROM ITS OWN CLONAL CASHEW NURSERIES TO PROVIDE A BOOST TO CASHEW CULTIVATION IN THE STATE. THE RAISING OF CASHEW PLANTATION REQUIRES VARIOUS BASIC AGRICULTURE ACTIVITIES LIKE DIGGING OF PITS, SOWING OF CASHEW SEEDS PLANTING SEEDLINGS, HOEING, MANURING ETC. WERE NECESSARY WHICH THE ASSESSEE - CORPORATION HAS TO PERFORM. THE CORPORATION HAS ALSO UN DERTAKEN SUBSEQUENT AGRICULTURAL OPERATION LIKE DE - WEEDING, HOEING, DIGGING UP THE SOIL AROUND THE GROWTH, MANURING, GAP PLANTING, BUSH CLEANING DE - TOPPING. PRUNING, PLANT PROTECTION MEASURES BY SPRAYING, PESTICIDES, SWABBING TO PROTECT THE PLANT FROM WHIT E ANT, STEM BORER AND OTHER DISEASES, WATCH AND WARD ETC. IN THE TRANSFERRED PLANTATIONS AND INCURRED HUGE EXPENDITURE AS IS EVIDENT FROM THE AUDITED PROFIT AND LOSS ACCOUNT PREPARED ON THE BASIS OF BOOKS OF ACCOUNT MAINTAINED BY CORPORATION AND ENCLOSED T O THE RETURN OF INCOME FLIED FOR THE ASSESSMENT 3 YEAR UNDER CONSIDERATION AS WELL AS IN PRECEDING ASSESSMENT YEARS. THE AGRICULTURAL OPERATIONS ALWAYS MEAN SUCH OPERATIONS AS HAS BEEN CARRIED OUT ON THE LAND ITSELF NAMELY THAT OF DIGGING OF SOIL AND SOWING THE SEEDS AND RAISING OF CROPS AND PLANTS AS WELL AS SUBSEQUENT OPERATION IN THE PROCESS OF AGRICULTURAL SUCH AS WEEDING, DIGGING OF THE SOIL AROUND THE GROWTH, REMOVAL OF UNDESIRABLE UNDER GROWTH AND ALL THE OPERATIONS WHICH FOSTER THE GROWTH AND PRESERVA TION OF THE GROWTH NOT ONLY FROM INSECTS AND PESTS BUT ALSO FROM DEPREDATION FROM OUTSIDE, TENDING. PRUNING, CUTTING HARVESTING ETC., IN THE CASE OF TRANSFERRED PLANTATIONS ALL THESE BASIC AND SUBSEQUENT AGRICULTURAL OPERATIONS HAD BEEN CARRIED OUT ON THE LAND. IT IS NOT NECESSARY THAT THE PERSON EARNING INCOME FROM SALE OF THE PRODUCE MUST HAVE CARRIED OUT THE BASIC AND SUBSEQUENT AGRICULTURAL OPERATIONS. THE PRODUCE SHOULD BE SUCH AS HAS BEEN RESULT OF AGRICULTURAL OPERATIONS ON WHICH THE PERSON DERIVING THE INCOME MUST HAVE BEEN EMPLOYED THE OTHER OPERATIONS SUCH AS SUBSEQUENT OPERATION AND ALSO PERFORM PROCESS TO MAKE THE PRODUCE MARKETABLE. IN THE CASE OF TRANSFERRED PLANTATIONS SINCE ALL THE INGREDIENTS WHICH WERE REQUIRED TO MADE THE INCOME AGRICULTUR AL INCOME WERE PRESENT VIZ, AGRICULTURAL LAND , AGRICULTURAL OPERATION ON LAND, THE INCOME DERIVED FROM COMMERCIAL CROPS GROWN ON AGRICULTURAL LAND, THE INCOME EARNED FROM THE TRANSFERRED PLANTATIONS IS AGRICULTURAL IN THE HANDS OF AS ASSESSEE - CORPORATION I S EXEMPTED. THE ASSESSEE - CORPORATION OWNS 30599.99 HACT., OF CASHEW PLANTATIONS OUT OF WHICH 22436.99 HACT. , CASHEW PLANTATIONS WERE TRANSFERRED TO THE CORPORATION BY SOIL CONSERVATION DEPARTMENT. IN THE REMAINING AREA THE CORPORATION HAS RAISED CASHEW PLA N TATIONS OF ITS OWN IN BOTH THE C ASES THE CORPORATION HAS BEEN CARRYING ON AGRICULTURAL OPERATIONS TO EARN AGRICULTURAL INCOME. WHILE IN CASE OF PLANTATIONS RAISED BY THE ASSESSEE - CORPORATION, THE CORPORATION HAS PERFORMED BOTH BASIC PRIMARY AND 4 SUBSEQUENT AGRICULTURAL OPERATIONS, IN CASE OF TRANSFERRED PLANTATION THE CORPORATION HAS BEEN PERFORMING SUBSEQUENT AGRICULTURAL OPERATIONS TO EARN AGRICULTURAL INCOME. HOWEVER, IN AVAILABLE VACANT PATCHES OF THE TRANSFERRED PLANTATIONS THE ASSESSEE CORPORATION RAI SES NEW HYBRID PLANTATIONS BY PERFORMING BOTH BASIC AND SUBSEQUENT AGRICULTURAL OPERATIONS. 4 . THE LEARNED COUNSEL PERUSED THE ORDER OF THE ASSESSING OFFICER WHEREIN AFTER HAVING CONSIDERED THE DEFINITION OF AGRICULTURAL INCOME AS DEFINED IN SECTION 2(1A ) OF THE INCOME - TAX ACT,1961, HE TRIED TO LAY EMPHASIS ON THE WORD LAND HOLDING WHICH IS USED FOR THE AGRICULTURAL OPERATIONS CARRIED OUT. FOR THAT PURPOSE HE CONTINUED TO HOLD THAT THE ASSESSEE CAN BE SAID TO HAVE EARNED AGRICULTURAL INCOME ON THAT PORT ION OF THE LAND WHICH WAS TRANSFERRED BUT NOT WITH THE PORTION OF CASHEW PLANT ATIONS WAS SUBJECTED TO AGRICULTURAL OPERATION CARRIED BY IT. RELYING ON CERTAIN DECISIONS OF THE HONBLE IN THE CASE OF CIT V. RAJA BENOY KUMAR SAHAS ROY (32 ITR 466) AND IN THE CASE OF CIT V. NEW AMBADI ESTATES LIMITED (63 ITR 325) HE PROCEEDED TO BIFURCATE THE TOTAL RECEIPTS OF APPROXIMATELY RS.4 CRORES INTO AGRICULTURAL AND NON - AGRICULTURAL INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT HAVING ALLOWED TH E EXPENSES INCURRED FOR CARRYING OUT THE AGRICULTURAL OPERATION AMOUNT TO MORE THAN RS.3 CRORES, THE ASSESSING OFFICER HIMSELF CONTRADICTED THE INCOME OF AUCTIONING OF THE CASHEW NUTS WHICH IN THE SAME BREATH HE HAD HELD AS THE OUTCOME ON PERFORMING OPERAT IONS PERTAINING TO AGRICULTURAL INCOME. IN OTHER WORDS, THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE BEGINNING OF HIS ASSUMPTION TO HOLD LAND TRANSFERRED AND BARREN LAND ALREADY AVAILABLE NOT BELONGING TO THE SOIL CONSERVATION DEPARTMENT WAS T HE ONLY LAND WHICH COULD BE CONSIDERED AS ASSESSEE CARRYING ON AGRICULTURAL OPERATION. HIS 5 FURTHER COMPUTATION OF AGRICULTURAL INCOME THEREFORE OUG HT TO HAVE RESULTED IN NEGATIVE TO THE ASSESSEE WHEN HE COMPUTES THE TAXABLE INCOME IN THE HANDS OF THE ASSES SEE A T RS.1.55 CRORES AS AGAINST RS.5 0,47,465 RETURNED BY THE ASSESSEE. THIS CLEARLY INDICATES THAT THE ASSESSING OFFICER HAS NOT ABIDED TO HIS OWN OBSERVATION TO THE FACT THAT WHEN THE ACREAGE OF 30,599.99 HECTORS WAS CULTIVATED AND NURTURED FOR THE NEW P LANTATION S RESULTING IN GROWTH OF CASHEW NUTS BELONG ED TO THE SOIL CONSERVATION DEPARTMENT , WAS FOR THE PURPOSE OF MAINTENANCE AND NURTURING THE CASHEW NUT WHICH WAS THE MAIN OBJECT FOR FORMING A SEPARATE WHOLLY OWNED GOVERNMENT UNDERTAKING BY THE ORISSA G OVERNMENT. THE LAW PROVIDES THAT 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 HIM FIT TO BE TAKEN TO MARKET IS TO BE C ONSIDERED AS AGRICULTURAL INCOME WAS ACTUALLY THE CULMINATION OF THE AGRICULTURAL OPERATION CARRIED OUT WHEN THE ASSESSEE AUCTIONED THE PRODUCE WHEN THEY ARE IN THE TREES ITSELF. THEREFORE, THERE WAS NO OCCASION BEFORE THE ASSESSING OFFICER TO SEGREGATE TH E NON - EXEMPTED PORTION OF THE INCOME BY ADDING THE PROPORTION OF 6435.020 HECT ERS TO 30,599 HECTORS. BY COMPUTING NON - EXEMPTED PORTION OF INCOME RS.60,50,270 FROM THE TOTAL INCOME FROM PLANTATION OF RS.87,11,791 HE HAS ALLOWED EXPENSES INCURRED FOR CARRYI NG OUT THE AGRICULTURAL OPERATION TOTAL L ING RS.3,16,10,725 HAS LED TO HIS FAULTY COMP UTA TION OF INCOME OF THE ASSESSEE AT RS.1,55,76,256 WHEN THE ASSESSEE HAD ALREADY RENDERED RS.50,47,457 AS TAXABLE INCOME. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE EXPLANATION PROVIDED IN THE SAID SECTION CLEARLY REMOVES DOUBTS ABOUT THE LAND HOLDING PATTERN WHEN BOTH THE CULTIVATOR AND THE OWNER ARE THE GOVERNMENT AND 6 DEVIATION, IF ANY, HAS BEEN EXPLAINED IN SUB - CLAUSE (III) OF SUB - SECTION 14 OF THE SAID SECTION. THE AGRICULTURAL LAND IS NOT SITUATED SO AS TO CONSIDER THE TRANSFER A SHAM BETWEEN THE GOVERNMENT. THEREFORE, HE CON TINUED HIS ARGUMENT S BY SUBMITTING THAT THERE WAS NO OCCASION EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE LEARNED CIT(A) TO HOLD THAT THE INCOME GENERATED FROM THE AUCTION OF CASHEW NUTS IN TREES CAN BE APPORTIONED ON THE BASIS OF PATTERN OF LAND HOLDINGS BY TOT ALLY IGNORING THE FACT THAT 100 % EXPENSES CLAIMED PERTAIN TO CARRYING OUT THE AGRICULTURAL ACTIVITIES. HE ALSO CITED THAT THE TRIBUNAL HAS ALSO CONSIDERED THE REVENUES APPEAL WHEN THE ASSESSING OFFICER HELD THE INCOME FROM NURSERIES AS INCOME FROM BUSINESS AND WAS DELETED BY THE LEARNED CIT(A) ON THE SPECIFIC PROVISIONS OF LAW THAT THE SEEDS AND SEEDLINGS GROWN IN THE S AME SET OF LAND CANNOT BE SEGREGATED TO BE HELD AS BUSINESS INCOME. 5. CONCLUDING HIS ARGUMENT S HE SUBMITTED THAT THE ASSESSING OFFICER AND THE LEARNED CIT(A) THEREFORE ASSUMED TO ESTABLISH NON - AGRICULTURAL INCOME FROM THE SAME SET OF FACTS AGAINST WHICH NO CONTROVERSY HAS BEEN POINTED OUT AS MENTIONED ABOVE. HE PRAYED THAT THE INCOME SO GENERATED ON THE BASIS OF AGRICULTURAL OPERATION CARRIED OUT FOR THE ENTIRE LAND ON WHICH AGRICULTURAL OPERATIONS WERE CARRIED OUT IS BOUND TO BE CONSIDERED AS AGRICULTURA L INCOME MAY BE DIRECTED TO BE ADOPTED BY THE ASSESSING OFFICER. 6. ON THE CONTRARY, THE LEARNED DR POINTED OUT THAT THE ASSESSING OFFICER WAS CATEGORICALLY JUSTIFIED IN APPORTIONING THE PLANTATION ON THE LAND WHICH ASSESSEE CULTIVATED BEING BARREN OR WI TH PLANTATION FOR GROWING THE CASHEW NUT WAS CONSIDERED AS INCOME FROM AGRICULTURAL OPERATIONS CARRIED OUT WAS THEREFORE HELD AT 20% OF THE TOTAL INCOME AND THE REMAINING INCOME HAVING 7 COME FROM PLANTATION WHICH STOOD TRANSFERRED ALONG WITH THE LAND TO THE ASSESSEE WAS CONSIDERED AS NON - EXEMPT CITING THE DECISIONS OF HONBLE SUPREME COURT STATED SUPRA. THE LEARNED CIT(A) THEREFORE WAS JUSTIFIED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER BY NOTING THAT THE DECISIONS IN THE CASE OF CIT V. RAJA BENOY KUMAR SAHAS ROY (32 ITR 466) AND IN THE CASE OF CIT V. NEW AMBADI ESTATES LIMITED (63 ITR 325) WAS TO BE CONSIDERED ON THE LAND HOLDING PATTERN FOR DERIVING INCOME FROM PLANTATION WHICH FACTS AND STATEMENTS ARE BEFORE THE AUTHORITIES BELOW CLEARLY LEAD TO THE FINDING THAT THE APPORTIONED PORTION OF INCOME WAS TO BE HELD AS NON - EXEMPT. THE INCOME FROM NURSERY HAVE BEEN SPECIFICALLY PROVIDED AS INCOME FROM AGRICULTURAL INCOME THEREFORE RIGHTLY CONSIDERED BY THE LEARNED CIT(A) FOR DELETION AS OTHERWISE HELD BY THE ASSESSING OFFICER AS INCOME FROM BUSINESS BECAUSE THE LEARNED CIT(A) SPECIFICALLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER ON THE FINDING THAT THE PLANTATIONS STOOD ON THE LAND TRANSFERRED CANNOT BE CONSIDERED FOR CARRYING OUT THE AGRICULTURAL OPE RATION RENDERING INCOME FROM AGRICULTURAL INCOME. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. NO CONTROVERSY HAS BEEN POINTED OUT WITH RESPECT TO CARRYING OUT THE AGRICULTURAL OPERATION ON THE PATTERN OF LAND HOLDI NG BY THE ASSESSEE AS HAS BEEN BROUGHT OUT. THE SOIL CONSERVATION DEPARTMENT OF THE GOVERNMENT OF ORISSA IN ORDER TO MAINTAIN THE PORTION OF THE LAND WHICH HAD WITH PLANTATION OF CASHEW NUTS TRANSFERRED THE SAME TO THE ASSESSEE FOR CONTINUING THE AGRICULTU RAL PROCESS OF GROWING AND REPLANTING OF CASHEW NUTS FOR THE ULTIMATE PRODUCE OF CASHEW KERNELS THAT HAS BEEN AUCTIONED BY THE ASSESSEE WHEN TREES BORE FRUITS. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT TILL THE TIME OF FRUIT IS PLUCKED THE ASSESSEE HAD NOT CARRIED OUT 8 ANY AGRICULTURAL OPERATION. HE HAS ALLOWED 100% EXPENSES CARRIED OUT WHICH REQUIRE THE VARIOUS METHOD AS NARRATED BY THE LEARNED COUNSEL FOR THE ASSESSEE. THE ASSESSING OFFICER HIMSELF HAS CONSIDERED THE DEFINITION OF AGRICULTURAL INCO ME AS PROVIDED IN SECTION 2(1A)(A ) (II) OF THE INCOME - TAX ACT,1961 THAT 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 H IM FIT TO BE TAKEN TO MARKET HAS TO BE CONSIDERED AS AGRICULTURAL INCOME HAS ONLY BIFURCATED THE LAND HOLDING PATTERN TO CONSIDER THE PORTION OF NON - EXEMPTED BOTH TRANSFEREE AND TRANSFEROR ARE GOVERNMENT OF ORISSA UNDERTAKINGS THEREFORE CANNOT BE FLOUTING TO THEIR OWN LOSS AS PROVIDED IN SECTION 14 CLAUSE (III) OF THE SAID SECTION. THEREFORE, THE FACTS OF THE ASSESSEES CASE ARE CLEARLY DISTINGUISHABLE AND WAY BEYOND CO NSIDERATION OF THE FACT AS CITED IN THE CASE LAWS OF THE HONBLE SUPREME COURT NAMELY C IT V. RAJA BENOY KUMAR SAHAS ROY (32 ITR 466) AND IN THE CASE OF CIT V. NEW AMBADI ESTATES LIMITED (63 ITR 325). HAVING ALLOWED 100% EXPENSES INCURRED BY THE ASSESSEE , WHICH HAVE BEEN PERUSED BY US IN THE FINANCIAL STATEMENT , CLEARLY INDICATES THAT THE P LANTATION IF SO TRANSFERRED IN 1979 MAY OR MAY NOT HAVE EXISTED IN THE AYS UNDER CONSIDERATION BECAUSE OF THE ADMITTED FACT THAT THE LIFE SPAN OF CASHEW PLANT IS 15 TO 20 YEARS. WE HAVE ALSO BEEN SUBMITTED WITH THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2002 - 03 WHEREIN THE ASSESSING OFFICER HAS ACCEPTED THE INCOME AS RETURNED BY THE ASSESSEE INTER ALIA INCLUDING THE INCOME FROM AGRICULTURAL OPERATION. THEREFORE, IT WAS AN EXTRANEOUS EXERCISE UNDERTAKEN BY THE ASSESSING OFFICER TO CONSIDER THE LAND HOLDIN G PATTERN ON DEFAULT TO CONSIDER THE PLANTATION FROM NON - AGRICULTURAL OPERATION ON THE BASIS OF CASE LAWS CITED. WE HAVE BEEN ALSO BEEN APPRISED TO THE FACT THAT THE ASSESSING OFFICER HAS NOT ALLOWED THE 9 EXPENSES INCURRED FOR CARRYING OUT THE AGRICULTURAL OPERATION ON THE SO CALLED NON - EXEMPTED INCOME WITHOUT ASSIGNING ANY REASON AS TO HOW THE LOSS, IF ANY, WAS TO BE CONSIDERED FOR THE APPLICABILITY OF ADOPTING AGRICULTURAL INCOME ONLY FOR RATE PURPOSES. IN VIEW OF THE ABOVE, WE HAVE NO HESITATION IN ALLOWI NG THE ASSESSEES APPEAL AND DIRECT THE ASSESSING OFFICER TO ADOPT THE AGRICULTURAL INCOME AS RETURNED EXEMPTED BY THE ASSESSEE. 8. ON THE ISSUE OF PROVIDENT FUND HAVING BEEN DEPOSITED WITHIN THE DUE DATE, WE ARE INCLINED TO HOLD THAT THE LEARNED CIT(A) ON THE BASIS OF FACTS BROUGHT ON RECORD RELIED ON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. SYNERGY FINANCIAL EXCHANGE LTD. [2007] 288 ITR 366 (MAD) DIRECTED THE ASSESSING OFFICER TO ALLOW THE SAME IN THE IMPUGNED ASSESSMENT YEAR 2 004 - 05 WHEN THE LEARNED DR WAS APPRISED OF THE PAYMENT VOUCHERS DT.1.5.2004 DID NOT AFFECT THE APPLICABILITY OF THE SAID SECTION IN RESPECT OF DUE DATE . THIS GROUND OF APPEAL RAISED IN THE ASSESSMENT YEAR 2004 - 05 IS ALLOWED. 9. IN THE RESULT, BOTH THE APPE ALS OF THE ASSESSEE ARE ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON DT. 20 TH MAY, 2011 S D/ - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 20 TH MAY, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. 10 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: ORISSA STATE CASHEW DEV.CORPN.LTD., 2 ND FLOOR, F - 4 BLOCK, INDRADHANU MARKET, IRC VILLAGE, BHUBANESWAR 2. THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(1), BHUBANESWAR. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECR ETARY.