IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER &

HON’BLE SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No. 7214/Mum/2025 (Assessment Year: 2016-17)

Daftari agro Biotech Pvt. Vs. Ward 9(3)(1), Mumbai Ltd. Aayakar Bhawan

405, 2^nd Sea Crest Sat Mumbai - 400051 Bunglows Andheri (W)

Mumbai, Mumbai - 400058 PAN GIR No. AABCD2102Q /

Applicant Respondent ( ) ( )

Assessee by Shri Madhav Vichore Revenue by Shri Brajendra Kumar (SR. DR)

Date of Hearing 09.02.2026 Date of Pronouncement 01.04.2026 आदेश ORDER /

PER SANDEEP GOSAIN, JM:

The present appeal has been filed by the assessee challenging the impugned order 15.09.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2016-17. The following grounds are reproduced below:

“Ground 1. On the facts and circumstances of the case and

the law, the learned commissioner of income tax appeals

erred in. 1 confirming the order of the assessing officer

who disallowed claim of exempted income (agricultural income) from sale of foundation seeds of Rs.7099900.

Ground 2. On the facts and circumstances of the case and the law, the learned commissioner of income tax appeals erred in holding that assessee claim of agricultural activity is not borne out of the facts even when same is not doubted anywhere by the assessing officer.

Ground 3. On the facts and circumstances of the case and the law, the learned commissioner of income tax appeals erred in denying exemption holding that essential character of assesses operation is that of business entity engaged in commercial exploitation of research derived seeds disregarding the provisions of Article 366(1) of the constitution of India.

Ground 4. On the facts and circumstances of the case and the law, the learned commissioner of income tax appeals erred in holding that assessee has been recognized as Research and 4 Development company earlier and hence operations are commercial in characters disregarding the fact that income in instant case is derived from the land and thus falls within definition of Section 2(1A) of the Act. Ground 5. On the facts and circumstances of the case and the law, the learned commissioner of income tax appeals erred in 5 dismissing jurisdictional high court decisions in Ajanta Seeds Ltd which interalia held that seed production is agricultural activity.

Ground 6. On the facts and circumstances of the case and the law, the learned commissioner of income tax appeals erred in concluding that entire arrangement is designed to recharacterize business income as agricultural income to avail exemption us 10(1) even when nothing of this sort is alleged by the assessing officer and there is nothing on record to indicate so.

Ground 7. On the facts and circumstances of the case and the law, the learned commissioner of income tax appeals erred in holding that agricultural income under S 2(1A) does not extend to activities that are predominantly scientific and commercial in nature even though they may involve cultivation at certain stages.

Ground 8.On the facts and circumstances of the case and the law, the learned commissioner of income tax appeals erred in holding and applying aforementioned reasoning ignoring the facts that assessee is no more carrying out research activities during the year has utilized the seeds to produce foundation seeds which were sold to other for production of hybrid seeds for ultimate utilization by the farmers and assessee has no licensing OR expertise to produce and sell hybrid seeds and all activities are land related and thus qualify for exemption under the Act.

”

2. All the grounds raised by the assessee are interrelated and interconnected and relate to challenging the order of the Ld. CIT(A) in upholding the order of the AO in disallowing the claim of exempt income from the sale of foundation seeds. Therefore, we have decided to adjudicate these grounds through the present consolidated order.

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