Section 115JB of Income Tax Act, 1961— In the instant case, The question of law urged by the assessee is that the ITAT fell into error in ignoring the Explanation to second proviso of Section 115JB(2)(ii) of the Act.

The Assessing Officer was of the opinion that sale of agricultural land, and its exclusion, from the MAT provision had resulted in its exclusion from the calculation of the book profit of the assessee which was wrong. The assessee appealed successfully to the CIT(A), who noted the Section 2(14) and Section 10(1), which exclude agricultural income.

The revenue appealed to the ITAT, which was of the opinion that the Assessing Officer’s findings were correct. The ITAT held that agricultural income is undoubtedly exempted under Section 10(1) and deserves exclusion.

Held that— Textually, it is clear that “revenue” derived from land is not deemed to have been included in any income arising from transfer of land. This Explanation was introduced with retrospective effect from 01.04.1989 and was subject matter of the challenge before Union of India Vs. S. Muthyam Reddy, (1999) 240 ITR 341. The provision, per se, in opinion of the court, itself is clinching. In the absence of any specific definition as to what constitutes “revenue” under the Act, the normal meaning attributable (having regard to the rule of ejusdem generis, with respect to the expression “rent” used) would necessarily mean any form of income derived from the asset i.e. land which in turn pre-supposes its existence in the hands of assessee. The other interpretation given by the assessee, that even sale constitutes “revenue” cannot be pressed into service because the transaction of sale results in destruction of a revenue or rent generating asset.[KRISH HOMES PRIVATE LIMITED VERSUS INCOME TAX OFFICER, WARD 2 (3) , ALWAR] [2019] 15 ITCD Online (61) [RAJASTHAN HIGH COURT]