Will milk sale be taxable if it is not main product??

rahul tusnial (partner) (40 Points)

29 November 2011  

A QUESTION OF LAW........ need good responses...:-

 

Hi.
 
Have leased out some 5 acres agricultural land for vermicomposting.  
 
Have also reared cows for the purpose of COW-DUNG and COW-URINE to be used as raw material in vermicomposting and production of bio-pesticide. This is the main purpose. Turnover of Vermicompost and biopesticides sales = Rs.65,00,000/-.
 
But naturally we also get milk, which we sell as it is locally in the village. So, we can say that rearing of these cows is NOT MAINLY for milk or dairying. So we call it a by-product or co-product. Turnover of milk sales = Rs.15,00,000/-.
 
We also get some bio-gas in the process of vermicomposting which we also sell. This is also a co-product. Turnover of biogas sales = Rs.4,50,000/-.
 
We wish to ask if the milk sale, (since the purpose of rearing the cattle is not dairying but something else), will be exempt from income tax? Could you also give reference to certain case laws to support?? Will truly appreciate. Thanks.