THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HON’BLE SRI JUSTICE NARSING RAO NANDIKONDA INCOME TAX TRIBUNAL APPEAL NO.288 OF 2016 JUDGMENT: (per Hon’ble Sri Justice Narsing Rao Nandikonda)

This appeal is filed under Section 260A of the Income Tax Act 1961 (for short, ‘the Act’) against the order dated 20.03.2015 in ITA No.1594/Hyd/2014 passed by the learned Income Tax Appellate Tribunal, Hyderabad Bench ‘B’, Hyderabad, for the Assessment Year 2011-2012.

2. The assessee is a company engaged in the business of production of Hybrid seeds and it claimed for an exemption of Rs.39.26 crores under Section 10 (1) of the Act and also Rs.1.53 crores under Section 14A of the Act,1961andaccordingly filed returns for the Assessment Year 2011-2012, for total amount of Rs.5,78,67,231/-. The Assessing Officer after considering the entire material on record, passed an order opining that the assessee is not directly involved in any agricultural activity and the income earned by it from the production of seeds was not in the nature of agricultural income. Therefore, the Assessing Officer required the assessee company to explain as to why its claim for exemption under Section 10 (1) Act should not be