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A.Y. 2013-14 & 2014-15 show that the assessee paid compensation, it is only the payment on failure to deliver agricultural produce.

9. Referring to page 40 of the paper book, he argued that no risk and reward was associated with the assessee. It is only the compensation payable for any losses, injury, damages resulting from the use or handing of breeder seed/foundation seed or manuring, nutrition patterns, irrigation techniques and parental material supplied by the first party, he argued vehemently that in no event the assessee is liable to pay any incidental, consequential, special or punitive damages to the land owner.

11. Shri Piyush Kumar submits that none of the normal agricultural activities were undertaken by the assessee excepting supplying foundation seeds and giving scientific advice from time to time and ITA No. 2102 & 2103 of 2017 R.J. Biotech Ltd.

A.Y. 2013-14 & 2014-15 referred the terms and conditions of the agreement. Further, he argued that the farmer is not entitled to grow, except sowing seeds given by the assessee and farmer had to return the unused seeds. He submits that the farmer conducted cultivation and the assessee allowed machinery and advised for achieving better results. The farmer is only entitled for compensation for preparation of bed, sowing of the seeds, cultivation and for harvesting. The activity of farmer only multiplying the foundation seeds by using land and labour and the input given by the assessee is only technical supervision. The ld. D.R argued, the assessee paid fixed price crop wise and drew our attention to pages 169 to 189. Further, the duty of the farmer is to ensure facilities of the land, suitability of the land, cultivation ofland, watering of the land, for which the farmer received compensation for producing hybrid seeds for the assessee.

A.Y. 2013-14 & 2014-15 for raising the good crop like irrigation, fertilization, pests / disease combat, weeding, harvesting, threshing, etc.

18. Section (2) of the said agreement provides definitions to various activities, wherein it is noted clause (3) defines „Produce‟ as the proprietary hybrid or variety seeds / vegetables cultivated on the land from the foundation seeds by the First Party by employing the services of Second Party. Section (3) provides terms and conditions between both the parties as agreed. Clause (1) explains the term of agreement commencing on the effective date mentioned at serial number 3 of Schedule 1 annexed thereon to, which is from June, 2012 to May, 2015. Clause (2) refers to compensation in consideration to the Second Party for granting exclusive right to use the land during the term of cultivating the produce and for agreeing to perform and carry out the agricultural operations on behalf of the First Party. Sub-clauses of clause (5) of section (3) refers to the services to be rendered by the Second Party that the Second Party shall devote its time and attention in accordance with the best industries standards, use reasonable skill and care in providing the services, to keep the First Party promptly informed and the farmer shall liable to pay all taxes, cess and other impositions such as land revenue vide clause 6 of section 3.

24. In the present case as we gathered from the terms and conditions from the seed production agreement i.e. pages 33 to 43 that the assessee, we note except supplying breeder or parent or foundation seeds or parental material for the purpose of cultivation of the produce and giving scientific advice from time to time, none of the basic operations are subsequent operations undertaken by the assessee. Further, we note from the agreement that the land owner conducts the cultivation and the assessee gives instructions for the production of proprietary hybrid or variety seeds / vegetables. The said land owner by using such foundation seeds follows the due process including the normal agronomic practices required for raising a good crop, like land preparation, irrigation, fertilization, pests and disease combat, weeding, harvesting, threshing, etc. which is evident from clause (4) of section (2) of the agreement. Admittedly, the land owner while involving all such ITA No. 2102 & 2103 of 2017 R.J. Biotech Ltd.