Fresh Bowl Horticulture Pvt. Ltd. vs. Income Tax Officer

Parties Involved

Facts Summary

Fresh Bowl Horticulture Pvt. Ltd. is a company engaged in the cultivation and sale of edible white button mushrooms. The company cultivates mushrooms using a soil-based 'vertical' farming method in controlled environments. The assessee reported total income of Rs. 68,223/- from interest income and claimed gross agricultural receipts of Rs. 22,27,04,010/- from mushroom cultivation, exempt under section 10(1) of the Income-tax Act. The Assessing Officer treated the mushroom income as business income and added Rs. 22,27,04,010/- as agricultural income. The assessee appealed to the Commissioner of Income Tax (Appeals), which was dismissed. The assessee then appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether income derived from cultivation and sale of white button mushrooms should be treated as business income instead of agricultural income under section 10(1) of the Act.
• 2. Whether the Assessing Officer was justified in treating the income from mushroom cultivation as business income.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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