PIONEER OVERSEAS CORPORATION vs. ADDITIONAL DIRECTOR OF INCOME TAX

IN THE HIGH COURT OF DELHI AT NEW DELHI 71 ITA 1223/2010 . PIONEER OVERSEAS CORPORATION ..... Appellant Through Ms.Shashi Kapila, Advocate versus ADDITIONAL DIRECTOR OF INCOME TAX ..... Respondent Through none CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN . O R D E R 17.08.2010 . CM No.14685/2010 (exemption) Allowed, subject to all just exceptions. ITA No.1223/2010 The present appeal preferred under Section 260A of the Income Tax Act, 1961 is admitted on the following substantial questions of law: 1. Whether the tribunal erred in law in holding that appellant?s income derived from cultivation and sale of parent seeds does not entirely fall within the definition of ?agricultural income? under Section 2(1A) of the Income Tax Act, 1961, even though there is no finding by the tribunal that no basic operations on land were carried out by the appellant? . 2. Whether the tribunal wrongly applied sub-clause (ii) and (iii) of Section 2(1A) holding that the research conducted several years prior to the commencement of basic operations like tilling of land and sowing of breeder seed this year constitutes ?process? which was applied to the produce of parent seed harvested in the relevant previous year? ITA 1223/2010 page 1 of 2 . . . 3. Whether the tribunal erred in law in holding that Research and Development of breeder / parent seed and its subsequent use as input for cultivation of parent seed constitutes ?one single composite activity? and therefore attributing ninety percent of parent seed to research and hence treating it as business income under Rule 7 of the Income Tax Rules, 1962 read with sub-clauses (ii) and (iii) of Section 2(1A)(b) of the Act? . Issue notice. Let this appeal be linked with ITA Nos.1210-1213/2010. . . . CHIEF JUSTICE . . . MANMOHAN, J AUGUST 17, 2010 nm . . . . . . . . . . . ITA 1223/2010 page 2 of 2