Section 2(1A) of the Income Tax Act
The decision most relied on for Section 2(1A) is CIT v. Raja Benoy Kumar Sahas Roy (32 ITR 466), cited in 132 of the 117 judgments on BharatTax that turn on this section.
Leading authorities on Section 2(1A)
Income is considered agricultural income, exempt under Section 10(1), only if the land undergoes a measure of cultivation involving basic primary operations prior to germination and subsequent post-germination activities requiring human skill and labour.
The principle of res judicata or estoppel does not strictly apply to Income Tax authorities, including the Tribunal. However, an earlier decision on the same question should not be reopened if it was arrived at after due inquiry, was not arbitrary or perverse, and no fresh facts are presented.
A transaction involving the purchase of land, especially if part of a series of similar transactions and likely to be acquired by the government, can be considered an adventure in the nature of trade, leading to the profit being assessed as business income.
Agricultural income exemption is denied when no lease of land is created, as leasing might be prohibited under relevant land reform acts.
The statutory mandate for an Assessing Officer to provide an opportunity to rebut evidence is not discretionary and is an indispensable requirement, embodying the principle of natural justice.
