AGRICULTURAL INCOME

i think yes...

Dear Raj Kumar,

                     Income derived from cultivation is agricultural income. THE SC in the cae of Raja Benoy Kumar Sahas Roy,ITR466, has held that income derived from basic and subsequent agri operations bear the character of agri income. Hence, the farmer should cultivate vegetables and sell the same to agents. if he buys the same from other farmers and sells to agents, it does not amount to agri incomme

Yap it is.

nice clearification dear CA G.muguntha.

thanks

;)
 

Hi Raj kumar,  The answer is farmers' agricultural  income is not taxable

Going by what the SC has said is ok but as an company you may have a problem practically. Though full details are not given i assume you are asking this question  on behalf of a company either the company is in agricultural operation itself  or buying from some middleman. 

So as said above it will be difficult to monitor whether the farmer is  1. buying from some other and selling  or  2. cultivating and selling.  Since in practice it will be difficult to monitor the farmer and bring him under our internal controls.  Only a declaration withregard the fact that  this is produced by him and  there is some land or right to land in his name  should suffice . Since you cannot monitor whether he has produced the whole quantity or part quantity  or procurred from outside

Further if you are a agriculture company then the story is different since you have to account the purchases.

In short you can use or mis-use the law as per your need. It is a benefit for poor agriculturists like me

Originally posted by : CA.G.Muguntha Narayanan
	Dear Raj Kumar,                      Income derived from cultivation is agricultural income. THE SC in the cae of Raja Benoy Kumar Sahas Roy,ITR466, has held that income derived from basic and subsequent agri operations bear the character of agri income. Hence, the farmer should cultivate vegetables and sell the same to agents. if he buys the same from other farmers and sells to agents, it does not amount to agri incomme

 AGREED WITH CA. NARAYANAN , WELL EXPLAINED.

Originally posted by : CA.G.Muguntha Narayanan
	Dear Raj Kumar,                      Income derived from cultivation is agricultural income. THE SC in the cae of Raja Benoy Kumar Sahas Roy,ITR466, has held that income derived from basic and subsequent agri operations bear the character of agri income. Hence, the farmer should cultivate vegetables and sell the same to agents. if he buys the same from other farmers and sells to agents, it does not amount to agri incomme

 agree with him.........very nicely & clearly explained