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2023 Supreme(Del) 2736
IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Tara Vitasta Ganju, JJ.
PC Commissioner of Income Tax – 20 – Appellant
Versus
M/s Fish Poultry And Egg Marketing Committee – Respondent
ITA 72 of 2023 & CM No. 6063 of 2023
Decided On : 08-02-2023
Mr. Zoheb Hossain, Senior Standing Counsel with Mr Vipul Agarwal and Mr Parth Semwal, Standing Counsels, for the Appellant.
None, for the Respondent.
The interpretation of the definition of 'agricultural produce' under the Delhi Agricultural Produce Marketing (Regulation) Act, 1998 and its application to the deduction of income under Section 10(26AAB) of the Income Tax Act, 1961.
Headnote:
Delay Condonation - Income Tax - ITA 72/2023 - The court considered whether the income received by the respondent/assessee, derived from regulating the market dealing with products such as fish, poultry, and eggs, is amenable to deduction under Section 10(26AAB) of the Income Tax Act, 1961. The court discussed the definition of 'agricultural produce' under the Delhi Agricultural Produce Marketing (Regulation) Act, 1998 and its wide scope, concluding that the fee earned by the respondent/assessee constitutes income derived from regulating agricultural produce. The appeal was dismissed.
Fact of the Case:
The appellant sought condonation of delay in re-filing the appeal. The appeal concerned the deduction of income received by the respondent/assessee from regulating the market dealing with products such as fish, poultry, and eggs under Section 10(26AAB) of the Income Tax Act, 1961. The Tribunal ruled in favor of the respondent/assessee, and the appellant appealed to the court.
Finding of the Court:
The court found that the fee earned by the respondent/assessee constitutes income derived from regulating agricultural produce, based on the wide definition of 'agricultural produce' under the Delhi Agricultural Produce Marketing (Regulation) Act, 1998. The conclusion reached by the Tribunal was upheld, and the appeal was dismissed.
Issues: The main issue was whether the income received by the respondent/assessee from regulating the market dealing with products such as fish, poultry, and eggs is amenable to deduction under Section 10(26AAB) of the Income Tax Act, 1961.
Ratio Decidendi: The court interpreted the definition of 'agricultural produce' under the Delhi Agricultural Produce Marketing (Regulation) Act, 1998 and concluded that the fee earned by the respondent/assessee constitutes income derived from regulating agricultural produce, supporting the Tribunal's decision.
Final Decision: The appeal was dismissed, and the parties were directed to act based on the digitally signed copy of the order passed.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral):
CM No.6063/2023 [Application filed on behalf of the appellant seeking condonation of delay of 331 days in re-filing the appeal]
1. This is an application moved on behalf of the appellant/revenue seeking condonation of delay in re-filing the appeal.
1.1. According to the appellant/revenue, there is a delay of 331 days.
2. For the reasons given in the application, the delay is condoned.
3. The application is, accordingly, disposed of.
ITA 72/2023
4. This is an appeal preferred against the order dated 31.05.2019 passed by the Income Tax Appellate Tribunal [in short, "Tribunal"]. The appeal concerns Assessment Year (AY) 2012-13.
5. The short point, even according to Mr Zoheb Hossain, who appears on behalf of the appellant/revenue, is whether the income received by way of fee by the respondent/assessee, is amenable to deduction under Section 10(26AAB) of the Income Tax Act, 1961 [in short, "1961 Act"].
6. The facts which have emerged from the record [and which are not in dispute], are the following:
(i) The respondent/assessee had filed its return on 29.09.2012 declaring a loss of Rs.2,23,585/- after excluding Rs.6,04,06,259/- from its total income by taking recourse to the provisions of Section 10(26AAB) of the 1961 Act.
(ii) The respondent/assessee is an Agricultural Produce Marketing Committee.
(iii) The respondent/assessee's return was subjected to scrutiny, whereupon an assessment order was framed under Section 143(3) of the 1961 Act. The assessed income was pegged at Rs.7,16,62,760/-, after making various disallowances.
(iv) Since the Assessing Officer (AO) [as is apparent from what is stated above] made an addition of Rs. 6,04,06,259/-, it impelled the respondent/assessee to prefer an appeal with the Commissioner of Income Tax (Appeals) [in short, "CIT(A)"], who ruled in favour of the respondent/assessee. The appellant/revenue, aggrieved by the said order, carried the matter in appeal to the Tribunal.
7. Therefore, before the Tribunal, the aspect which arose for consideration was as to whether the fee i.e., income derived by the respondent/assessee for regulating the market dealing with products such as fish, poultry and eggs, would fall within the scope of Section10(26AAB). In other words, whether the expression "agricultural produce" would cover the subject products [i.e., fish, poultry and eggs] regulated by the respondent/assessee.
8. Since there is no definition of "agricultural produce" provided in the 1961 Act, the Tribunal took recourse to the definition provided under Section 2 of the Delhi Agricultural Produce Marketing (Regulation) Act, 1998 [in short, "1998 Act"]. The definition, which has been extracted in extenso in the impugned order passed by the Tribunal, along with the schedule, for the sake of convenience, is set forth hereafter:
"2. Definitions - (1) In this Act, unless the context otherwise requires,
(a) "agriculture produce" means all produce and commodities, whether processed or unprocessed, of agricultural, horticulture, apiculture, viticulture, pisciculture, sericulture, animal husbandry, fleeces and skins of animals and forest products as are specified in the Schedule and such other produce as may be declared by the Government by notification to be an agricultural produce and also includes admixture of two or more of such produce.
xxx xxx xxx
I. Animal Husbandry Products -
1. Eggs
2. Butter
3. Poultry
4. Cattle Meat
5. Ghee
6. Goat Meat
7. Milk & Milk
II. Apiculture - 1. Honey
III. Cattle Feeds -
IV. Cereals -
V. Condiments, Spices and others -
VI. Fibers -
VII. Fruits -
VIII. Grass and fodder
IX. Gur, Sugar, Sugarcane, Khandsari, Shakhar and rashkat.
X. Narcotics - Tobacco
XI. Oilseeds - Castor seed, Cotton seed, Sarson, Toria etc.
XII. Pesciculture - Fish
XIII. Pulses - Arhar, Beans, Gram, Moth, Mung, Peas etc.
XIV. Vegetables - Arvi and Arvi Patta, Carrots - all types, Onion etc.
XV. Horticulture - Flowers, cut flowers and Potted Plant
