Income Tax Appellate Tribunal - Hyderabad
Dcit, Circle-2(1), Hyd, Hyderabad vs Inventaa Chemicals Ltd., Hyd, ... on 9 July, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
SPECIAL (B) BENCH, HYDERABAD
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT,
SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER
AND
SMT. P. MADHAVI DEVI, JUDICIAL MEMBER
ITA No. Asst. Year Appellant Respondent
1015/Hyd/15 2008-09 M/s. Inventaa
Industries Private
Dy. Commissioner of Limited,
1016/Hyd/15 2010-11 Income Tax, (Earlier known as M/s.
Circle-2(1), Inventaa Chemicals Limited)
HYDERABAD HYDERABAD
1017/Hyd/15 2011-12 [PAN: AAACI4539B]
1018/Hyd/15 2012-13
C.O. No. A.Y. Cross-Objector Respondent
53/Hyd/15 2008-09
In ITA No. 1015/Hyd/15 M/s. Inventaa
Industries Private Dy.
Limited, Commissioner of
54/Hyd/15 2010-11 (Earlier known as M/s.
In ITA No. 1016/Hyd/15
Income Tax,
Inventaa Chemicals Limited) Circle-2(1),
HYDERABAD HYDERABAD
55/Hyd/15 2011-12 [PAN: AAACI4539B]
In ITA No. 1017/Hyd/15
56/Hyd/15 2012-13
In ITA No. 1018/Hyd/15
For Revenue : Ms. K. Mamata Choudary,
Sr. Standing Counsel for I.T. Dept.,
For Assessee : Shri S. Rama Rao, &
Shri K. Gopal, ARs
:2:
ITA Nos. 1015 to 1018/Hyd/2015
C.O. Nos. 53 to 56/Hyd/2015
Date of concluding the Hearing : 25-06-2018
Date of Pronouncement : 09-07-2018
ORDER
PER J Sudhakar Reddy, AM:
The Hon'ble President ITAT, constituted this Special Bench to decide the following question and appeals vide order dt.25-07-2017 "Merely because instead of horizontal use on soil, vertical space is used, does the growth of mushrooms stand apart from agricultural operations?"
At the time of hearing, both the parties objected to the question framed. The Ld. Counsel for the assessee, Shri S. Rama Rao, submitted that the question, as framed, does not arise from the grounds raised by the revenue in these appeals. The Ld. Senior Standing Counsel, Ms. K.Mamata Choudary, submitted that the question does not reflect the grievance of the revenue, raised in its appeal. Both the parties requested the Bench to re-frame the question to be decided by the Special Bench and filed a combined memo in this regard suggesting a draft question. We are in agreement with the reframed question suggested by both the parties. This re-framed question was referred to the Hon'ble President, ITAT, who vide his order dt. 10th April, 2018, referred this re-framed question, to this Special Bench for disposal, along with the appeals as well as the cross objections for Assessment Years 2008-09, 2010-11, 2011-12 and 2012- 13:-:3:
ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 The question referred is as follows:
"Whether in the facts and circumstances of the case, the income from production and sale of Mushrooms can be termed as 'agricultural income' under the Income Tax Act, 1961?"
Facts in brief:
2. The assessee is a company engaged in the business of manufacture of bulk drugs. It also derives income from growing of "Edible white button mushrooms" ( Mushroom) under the name and style of 'Premier Mushroom'. The assessee was treating the income from growing mushrooms as "income from agriculture" and hence exempt u/s. 10(1) of the Income Tax Act, 1961 [Act]. A survey operation u/s. 133A of the Act was conducted on 23rd September, 2013, at the mushroom growing unit of the assessee-company located at Kallakal -
Village, Toopran - Mandal, Medak - District, Telangana. The Ld.Assessing Officer (AO) records that the survey was conducted to verify the process of mushroom growing by the assessee-company. During the course of survey, statements were recorded from Mr. K. Jagadish, Vice President (Operations) and Mr. C. Rajesh, another Vice President of the company. During the course of scrutiny proceedings, in reply to the queries raised by the AO, the assessee made various submissions. The gist of the submissions as summarized by the Ld.AO are set out in para 8, page 9 of the assessment order, the extract of which is as under: :4:
ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 "8. The gist of the submissions of the assessee is as under:
● Whether cultivation of mushrooms is agriculture or not is a question of fact.
● Operations are conducted on land which is agricultural land and the operations are agriculture in nature. Mushroom is a nutritious vegetable. The spawn is grown on soil.
● The operations are akin to nursery which has been recognized by the Act as agriculture by insertion of Explanation 3 to section 2(1A). ● Various Government authorities, Banks/FIs, World organizations and food organizations, Excise Department and others treat mushrooms as 'vegetables'.
● Mushroom growth is a natural agricultural activity and assessee is only a facilitator. Therefore, the decision of the Apex Court in the case of M/s. Venkateswara Hatcheries Pvt Ltd (237 ITR 174) applies. In the said decision, the Supreme Court held tht a natural product can be produced only through natural process and the facilities provided by human effort is not relevant and the production would always remain as natural product and cannot be attributed to any other process or activity associated or undertaken by human effort.
● The term "land" and "soil" are interchangeable and soil is nothing but land. The assessee also quotes dictionary definitions of land and soil. ● Reliance on section 80JJA is of no use as the section is repealed and perhaps it was the intention of legislature to treat mushroom cultivation as agriculture and hence repealing of the section. :5:
ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015
2.1. Findings of the A O :
The findings of the Ld. Assessing Officer ( A.O.) are summarised as follows:
a. Mushrooms are grown by the assessee in 'growing rooms' under 'controlled conditions' in racks placed on shelves above land and on Compost (manure) which is prepared with paddy straw, Horse manure, Chicken manure, Gypsum and Urea which is not land. Hence the activity is not agricultural activity.
b. The Hon'ble Supreme Court in the case of CIT Vs. Raja Benoy Kumar Sahas Roy (1957) [32 ITR 466] held that, income derived from some measure of cultivation of land with some expenditure of human skill and labour, renders the profit derived from the 'product' agriculture income which would be exempt u/s. 2(1A) of the Act. In the case of CIT Vs. Kokine Dairy (1938) [6 ITR 502], it was held that the term 'agriculture' does not cover activities remotely connected with land and when the assessee has not performed the basic operations on land, the income derived was held not to be agriculture income. Some of such instances are income from coconut thopes, income from sale of cocoons, income from sale of eucalyptus oil etc. c. Rule 7A, 7B and 8 of the Income Tax Rules, 1962 were referred to in support of the contention that unless income is derived from :6: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 performing basic operations on the land, the same could not be construed as 'agriculture income'.
d. Section 80JJA of the Act inserted by the Finance Act, 1979 w.e.f. 01- 04-1980 provided a deduction in respect of profit and gains from business of growing mushrooms and Circular No. 258, dt. 14-06-1979 and the explanatory Memorandum to the Finance Act, 1979, and Circular No. 372/1983 were relied upon to conclude that intent and understanding of the Legislature is that growing of mushrooms is not in the nature of agriculture income but is reckoned as income from business. He rejected the contention of the assessee that the withdrawal of this Section 80JJA of the Act was because the Government was of the view that the income earned from growing of mushrooms is agriculture income and hence exempt from tax. Therefore, no further deduction was required, on the ground that this is far-fetched and illogical. e. There is no dispute regarding the various processes mentioned in the letters dt. 10-01-2014 and 17-02-2014 written by the assessee setting out the various stages involved in the growing of mushrooms. It is important to note that no operations are carried out on land. In the detailed submissions made by the assessee, which ran into several pages, there is no categorical assertion by the assessee that some of the basic operations are carried out on land. On the reliance placed by the assessee :7: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 on the definition of 'land' as given in the Black's Law Dictionary, he held that soil could be construed as 'land', as per the dictionary meaning, if and only if, it remains attached to the earth. He held that the argument that soil even if removed from land would still be land, does not hold water. f. Regarding exemption of income derived from saplings or seedling grown in soil in pots, he held that this is a deeming provision introduced by the statute by way of explanation 3 to Section 2(1A) of the Act and hence cannot be extended to the assessee who is in the business of growing mushrooms.
g. Mushroom cultivation is not "agriculture" and falls under the category of "Fungi Culture". Reference was made to information available in Wikipedia, on the website http://www.americanmushroom.org / agaricus.pdf. He held that Mushroom is not a vegetable as argued by the assessee, but is a fungus. In outdoors, mushrooms grow on wood and the activity is not akin to that of a nursery.
h. The claim of the assessee that it owns 33 acres of land is not in dispute but the mushroom growing activity is not performed on this land. When the assessee is in possession of 33 acres of agricultural land, it was not necessary to purchase ballclay at Rs. 1 per Kg from M/s. Nyvelli :8: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 Lignite Corporation, Nyvelli for use in growing of mushrooms. Thus, land was never involved in the process of growing of mushrooms. i. Classification by or views of various Government and public sector agencies on whether growing of mushroom is an agricultural activity or not is of no consequence and does not help the assessee in claiming exemption u/s. 10(1) of the Act.
j. The statements recorded from the two senior functionaries of the assessee-company proves the fact that no agricultural operations were carried out on the land by the assessee, let alone basic operations on land. Even from the description of the activity, as evidenced from the website of the assessee-company, soil is only used for the purpose of providing stable bed in the trays and such activity is remotely connected with land. k. The Bangalore Bench of ITAT in the case of Blue Mountain Food Products Ltd., [14 ITD 254] held that mushroom growing is a business activity.
l. The statement recorded from the Managing Director of the assessee-company demonstrates that the main layer bed is compost which is not soil and that ballclay is obtained by the assessee from M/s. Nyvelli Lignite Corporation, Nyvelli. The Casing layer is only another :9: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 layer of manure mixed with coirpith, nutrients and ballclay, which helps in growth of mushrooms. The Managing Director did not give specific answers to the issue as to whether use of land was involved at any stage in the growth of mushrooms and whether the mushrooms in question are grown under controlled conditions.
2.2. At para 40 & 41, the Ld. Assessing Officer concluded as follows:
"40. From the above discussion, it is clear that either during the production of Spawn or in the preparation of Compost or Spawning the Compost no operations involving land or soil are carried out. The only instance of use of soil is when clay and coir pith is used as top dressing for providing moisture to the mushroom which are already sprouting or growing in the Compost. Hence, the operations carried out by the assessee in the growth of mushrooms do not meet the test of agricultural operations laid by the Hon'ble Supreme Court in the case of CIT Vs. Raja Benoy Kumar Sahas Roy (1957) [32 ITR 466]. Even the explanation 3 under section 2(1A) is not of any help to the assessee as no operations are carried out by it on land or in soil. Use of soil at a subsequent stage in the operations cannot be said to be carrying out of basic operations in the soil/land as discussed in the judgment supra.
41. In view of the detailed reasons mentioned above, I hold that income derived by the assessee from growing of mushrooms is not agricultural income and I proceed to assess the same as income under the head "Business or Profession". Addition Rs. 12,13,05,430/-"
3. Aggrieved, assessee carried the matter in appeal before the Ld.CIT(A) challenging, for all the Assessment Years, the findings of the :10: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 Assessing Officer that income derived from production of mushroom is not agricultural income. It also challenged the reopening of the assessments by the AO for the AYs. 2008-09 and 2010-11. The issue of non-grant of depreciation by the Assessing Officer, in respect of the assets held for production of mushrooms, was also challenged for all the four Assessment Years.
3.1. Before the Ld.CIT(A) assessee reiterated that growing of mushroom is an agricultural activity. It was submitted that, mushrooms are grown manually on the land in a specified atmosphere. It was contended that the assessee was producing a nutritious vegetable called mushroom which grow over a period of 1 ½ months on certain types of soil. A chart giving comparison between growing of mushroom and other crops was furnished. Reliance is placed on the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Sri Venkateswara Hatcheries Pvt Ltd [237 ITR 174] on the proposition that growth of mushroom is a natural and biological process and hence mushrooms are not articles or things. Reliance was placed on the views of various governmental departments such as NABARD, State Bank of Hyderabad, Ministry of Commerce and Industry, Central Excise Department and Ministry of Agriculture on the proposition that Government of India has treated mushroom production as an agricultural production. Reliance was placed on a number of judgments in support of the proposition of law relied upon by the :11: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 assessee. The findings of the Ld. AO were sought to be rebutted by the assessee in its submissions before the Ld.CIT(A).
4. In his rejoinder to these submissions, the Ld. AO for strengthening his findings that the cultivation of mushroom is not agricultural activity and that it is 'fungi' culture, relied on a report issued by PENN STATE College of Agricultural Sciences with regard to basic procedures for mushroom growing, wherein two different methods of growing mushrooms are given.
5. Findings of the Ld.CIT(A):
After considering the rival submissions, the Ld. First Appellate Authority has held as follows:
a. The reopening of assessments is valid in law. b. He relied on the definition of 'Land' and 'Soil' given in the Black's Law Dictionary and in Random House dictionary and held that the word 'land' includes any soil, and hence the prepared soil is land. That soil is the basis for production of mushroom as initial mushrooms spawn is prepared and the spawn is then cultured in a similar type of prepared soil, to be used as seed for cultivation of mushroom. Thereafter the same is removed from the soil and is :12: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 spread over the soil arranged in giant size trays, the depth of which is up to 8 inches. These trays contain soil and trays are kept vertically on the land and the watering of the soil is done through coir pith to maintain the required moisture. The Ld. CIT(A) relied on the literature published by the "Director of Mushroom Research" of "Indian Council of Agricultural Research" (ICAR) and came to a conclusion that usage of soil in these trays can be considered as usage of land. The Ld.CIT(A) also stated that 'even for cultivation of other crops, the land in the form of ground cannot be used and that only the upper layer of the soil is to be prepared for tilling, ploughing, watering and manuring'. As preparation of soil is required for production of mushroom, he concluded that edible mushroom is grown on land.
c. The Ld. CIT(A) held that the reference to Rule 7A, 7B and 8 of the Income Tax Rules, 1962 do not have any relevance to the facts of the assessee's case.
d. On the issue as to whether mushroom is a "plant" or "fungi", the Ld.CIT(A) held that the questions in this case as to whether the process of production is agriculture or not and whether the produce grown is "plant" or "fungi" are not relevant and that the relevant factor to be determined is the process of production. :13:
ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 e. He held that the word 'agro' means "land" and this definition includes soil which means all types of soils. The process of enriching the "soil" by adding fertilizers and wastages etc., is "culture of the soil" and when the soil is used for production of edible product, it is called as an agricultural product. f. The reference to provisions of Section 80JJA by the AO is not relevant as this provision of law is no longer in existence. g. On the reference to the material available in Wikipedia by the Assessing Officer, the Ld. CIT(A) held that though several thousands of species of mushrooms are there, only those which are grown on "soil" are "edible".
h. The Ld.CIT(A) referred to the judgement of the Hon'ble Supreme Court in the case of CIT Vs. Sri Venkateswara Hatcheries Pvt Ltd [237 ITR 174] for the proposition that merely because the conventional method of production is given a go by and artificial production is introduced, it would not change the character of production which is natural.
i. The Ld.CIT(A) observed that just because the assessee-company is using the land vertically by using large trays, for producing mushroom, by adopting a natural agricultural process and by :14: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 cultivating the soil, it cannot be said that land is not used for production of mushroom. It is a fact that the land is used for production, the sub-strata of which is soil. The ingredients of agricultural operations are embedded in the production of mushroom and the entire activity is similar to the production of any other vegetable and to the process of any other agricultural produce.
j. The decision of the Bangalore Bench of the ITAT in the case of Blue Mountain Food Products Ltd., [14 ITD 254] is not relevant, as the question before the Bench was, whether depreciation can be allowed for determining the income or not and that this decision of the Bangalore Benches was given when the provision of Section 80JJA of the Act, was in existence in the statute and that a decision with reference to a section which was later repealed, cannot be a precedence.
k. The views of various Government authorities and financial institutions, wherein mushroom is treated as a vegetable is relevant for the purpose of determining the issue. l. He relied on various decisions of the Hon'ble Supreme Court for the proposition that incentive provisions have to be liberally :15: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 interpreted and held that Section 10(1) of the Act has to be liberally interpreted.
m. He held that the decision of the Chandigarh Bench of the Tribunal in the case of Chander Mohan Vs. ITO [52 taxmann.com 203] (Chandigarh- Trib) is distinguishable as the process for production followed in that case is different from the process followed by the assessee and that the type of mushroom produced in that case is different from those produced by the assessee.
6. The Ld. CIT(A) concluded that production of mushroom is a process of agricultural production and income derived from such a process is agricultural income eligible for exemption u/s. 10(1) of the Act. The ld. CIT(A) did not adjudicate the grounds of the assessee relating to its claim of depreciation.
7. Aggrieved, Revenue has filed these appeals against this finding of the Ld. CIT(A) that income from production of mushroom is agricultural income. The assessee has filed cross-objections for the AYs. 2008-09 and 2010-11 on the issue of reopening and for all the four Assessment Years on the issue of claim of depreciation. :16:
ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 Revenue's submissions:
8. Ld. Sr. Standing Counsel Smt. K. Mamata Choudary supported the order of the Ld.AO and made detailed arguments. The brief submissions filed by her, stated succinctly are as follows:
• Mushrooms are fungus which are produced from spawn and not plants or crops and hence not agriculture. They are grown in trays of prepared soil in climate controlled rooms for commercial purposes. Even if certain activities are akin to cultivation, it cannot be treated as an agricultural income.
• A fundamental characteristic of land is that it is immovable and is a fixed part of the topography. Soil is a component of land/ earth but loses its identity of land once removed from it. Therefore soil ought not to be treated synonymously with land. • The reliance placed by the Assessee on the incomplete and selective definition of "Land" in Black's Law Dictionary to include soil and thereby equating soil to land is misleading, misplaced and contrary to the principles of noscissur a sociis. In fact the definition of "Land" as occurring in the 8th Edn. of Black's Law Dictionary makes it clear that land is the immovable portion of the earth's surface.:17:
ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 • Extract of "Land "from Black's Law Dictionary (8th Edn.) • Online extract of Balck's Law "Land"
• UoIvs. V Krishnamurthy 1994-2-L.W 452 (Mad HC) @pa14 • (Noscitur a sociis)- State of Bombay and Ors. V Hospital Mazdoor Sabha AIR 1960 SC 610 @ pa 9.
• The interpretation of 'land' for the purposes of Section 2(lA) assumes importance as it goes to the root of the legislative competence of the Parliament to tax such income. Entry 82 of List I of the Seventh Schedule read with Entry 46 of List II of the Seventh Schedule of the Constitution of India reserves the right to tax agricultural income with the States and outside the purview of the Union. Article 366(I) defines Agricultural Income to mean agricultural income as defined for the purposes of the enactments relating to Indian income tax.
• CIT vs. Williamson Financial Services (2008) 2 SCC 202 @pa 18-30 • Contextually, 'land' under the Income Tax Act is the real immovable property as can be seen from its use in relation to rent, income, capital asset, etc. To clothe it with the interpretation as sought to be :18: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 advanced by the Assessee would be contrary to the legislative use of such word in the statute.
• An exemption provision presumes the ability to tax certain types of income but such income being kept out of the scope of tax liability. The exclusion of agricultural income from the total income under Section 10(1) of the Act is not an exemption, as commonly perceived, as it is excluded on account of the Parliament having no power to tax agricultural income.
• The Hon'ble Supreme Court has held in CITvs. Raja Benoy Kumar Sahas (1957) 32 ITR 466 (and reaffirmed time and again) that the primary activities of cultivation of the land such as tilling, sowing, planting, etc. have to be carried out on the land itself in order it to be treated as agriculture or as agricultural income. Undisputedly, in the present case, no such primary activities are carried out on the land and the land is only the premise from where such activity is carried on.
• Classification of the land as agricultural land for land revenue purposes would not automatically lend the character of an agricultural income to activities carried out on it. Agricultural :19: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 income would necessarily, by statutory definition, mean income from land actually used for agricultural purposes. • The legislative intent and understanding had expressly been stated to treat production of mushrooms under controlled conditions as business income and sought to briefly incentivise such business by providing for certain deductions under the then Section 80JJA. • Section 80 JJA • Explanatory Note to Finance Act 1979 • CBDT Circular No. 258 of 1979 dt 14.06.1979 • Controlled conditions are commonly understood to mean that the climatic/environmental factors such as humidity, temperature, carbon dioxide, etc. are controlled.
• Explanation 3 to Section 2(lA) relating to income from seeds and saplings grown in nurseries would not aid the case of the assessee as the income from such nurseries have been included in the scope of 'agricultural income' by way of a deeming fiction. A deeming provision is enacted for the purpose of assuming the existence of a fact which really does not exist. Hence, by necessary corollary, it would mean that the fact is that income from such nurseries is not agricultural income. A deeming fiction can only apply to the :20: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 particular fiction it creates and cannot be expanded to any other type of activity.
● Explanatory Note to Finance Act, 2008 ● Manisli Trivedi vs. State of Rajasthan (2014) 14 SCC 420 @pa 14 • The ITAT has, though in different contexts, consistently considered income from production of mushrooms as not to be agricultural income. In fact, the ITAT, in Blue Mountain Foods, rejected the Revenue's contention that mushroom production is agriculture and allowed depreciation.
• Blue Mountain v. ITO (1985) 14ITD 254 (BANG) • Chander Mohan vs. ITO [2014J 52 taxmann.com 203 (Chandigarh) @ pa 12-13 • ACIT vs. Malhotra Mukesh Satpal [2008J 115 ITD 467 (Pune) @ pa 3.24-3.27 • The ratio of judgment of the ITAT in Rachna Dogra vs. ITO does not pertain to the issue on hand and the observation therein as to production of mushrooms being agricultural must therefore be one of sub silentio and therefore not binding.
● Sub silentio- Municipal Corporation of Delhi v. Gurnam Kaur (1989) 1SCC 101 @ pa 11.:21:
ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 • The reliance sought to be placed by the assessee on various organisations, banks and departments' classification of mushroom production as agriculture is not tenable as such classifications are not in pari material with that of the Income Tax Act and hence cannot be relied upon.
● Maheshwari Fish Seed Farm vs. TNEB (2004) 4 SCC 705 @ pa 10- 16 • The submission that the definition of mycelium is the vegetative part of the fungi and therefore is a vegetable is not tenable, as what is meant by vegetative part is the reproductive part of the fungus and not its classification as a vegetable.
Assesse's submissions:
9. Ld. Counsel for the assessee Shri S. Rama Rao, relied on the order of the Ld.CIT(A) and in support thereof made the following submissions:
• That mushrooms are broadly of two different categories, those which are edible and those which are not edible. Mushrooms grow spontaneously and among the edible mushrooms, the assessee produced a variety called "Edible white button mushrooms" which :22: ITA Nos. 1015 to 1018/Hyd/2015 C.O. Nos. 53 to 56/Hyd/2015 normally grow spontaneously in certain districts of Andhra Pradesh on Ant Hills.
• That the AO considered a variety of mushroom which is called "Shiitake Mushroom" which is normally grown on wood and trees and therefore is not relevant to the facts of the assessee's case. • That ballclay is a type of soil and that this soil is "cultured" by way of adding paddy straw, chicken manure, and other manure which degenerates into the soil.
• That the terms 'earth', 'land' and 'soil' have to be understood in the right perspective and that the top layer of earth, of about 8" to 10", is "soil" and this "soil" is only useful for the purpose of any agriculture. That in any type of cultivation, this top 8" to 10" of land, which is "soil", is what the farmer uses and that this is ploughed and cultured and prepared for agriculture production. • Referring to the argument of the Ld. Standing Counsel that land is immovable property and that the soil attached to such land, when cultured and used for production of plants is agriculture, he submitted that when the top layer of the land which is, "soil" becomes unfit for agriculture due to salinity, barrenness or otherwise, it is a common practice that soil is brought from river