Rental income of godown constructed on an agricultural land couldn't be termed as agriculture income

Facts:

a)  The assessee, a partnership firm, was carrying on business of constructing godowns and renting them to parties for earning rental income.

b)  It had constructed a godown on agricultural land belonging to its partners. The godown was given on rent and rental income so derived was declared by assessee as agricultural income.

c)  The Assessing Officer had accepted assessee's claim of agricultural income. The CIT passed a revisional order to hold that the rental income from godown could not be treated as agricultural income within meaning of section 2(1A)(c). The agrrieved-assessee filed the instant appeal.

The Tribunal held in favour of revenue as under:

1)  The income in the instant case needed to be considered under section 2(1A)(c). The requirement of section 2(1A)(c) is that the income should be derived from any building owned and occupied by the receiver of the rent or revenue of the land;

2)  In the instant case, neither the assessee was receiver of the rent or revenue of the land, nor was the building occupied by it;

3)  Further, the requirement of this section is that the building must be occupied by the cultivator or the receiver of rent-in-kind of any land with respect to which or with respect to the produce of which, any process which is ordinarily employed by a cultivator or receiver of rent in kind, (so as to render the produce raised or received by him fit to be taken to the market)  is performed;

4)  The assessee also failed to fulfill this requirement, as the godown building was occupied by 'K' and 'I', who were the assessee's tenants during the year under consideration and were not either cultivators, or receivers of rent in kind of any land.;

5)  Further, it had also not been shown by the assessee that either the land beneath the godown building, or the produce thereof was subjected to any process ordinarily employed by a cultivator or receiver of rent in kind to render the produce raised or received by him fit to be taken to the market. Thus, the rental income from godown could not be treated as agricultural income. - New Jain Godowns v. ITO [2014] 42 taxmann.com 434 (Delhi - Trib.)