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Agricultural income

(Querist) 18 September 2012 This query is : Resolved 
My client is a partnership firm deriving income from Poultry farming. With effect from the assessment year they have leased out their business to another firm alongwith the building, the cages for keeping the birds etc. The building is surrounded by land with coconut plantation of which there was no mention in the lease deed. The lesser firm enjoyed the yield from the trees and disclosed the agricultural income in their return. The AO did not accept the agr. income on the ground that since the entire premises have been leased out, it automatically means that the trees have also been leased out and no income could be derived from the trees by the lessor firm. The assessment has been appealed against. In appeal it is being contested that since no specific mention has been made about the trees in the lease deed it automatically means that the right to enjoy the yield is retained with the original land loard, i.e. the lessor firm. Kindly give me knowledge of any case laws on in this regard.
Jeevesh (Expert) 18 September 2012
Mr. Parthasarathi,

The answer to your query depends on the language in which the lease deed has been couched.

If the lease deed is quite clear on the face of it that entire premises has been leased out, than the view of AO is right, unless by an express clause in lease deed the right to trees has been reserved.
P.Parthasarathi (Querist) 19 September 2012
Thank you so much sir Jeevesh Saab.

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