Part - I MCQs **Case Scenario -1** Mr. Ananth is a traditional farmer who was inherited with 35 acres of rural agricultural land which was around 20 kms from nearest town. He is cultivating in 15 acres-Paddy, which is directly taken by rice traders. Another 10 acres of land is used for growing Sugarcane and as per practice sugarcane is purchased by sugar mills nearby the villages for which payments were received by Neft/RTGS/IMPS. Remaining area is cultivated for (1) Mulberry leaves & (2) Part of Mulberry leaves are used for being fed to silkworms and obtaining silk cocoons and selling these silk cocoons in market. During the financial year 2023-24, Mr. Ananth had got net Income of ₹4,00,000 from Sale of Paddy, ₹3,50,000 net gain on sale of Sugarcane and ₹ 75,000 by selling Mulberry leaves alone. He carried out Mulberry 5 silkworm production using his Mulberry leaves worth ₹50,000 and selling the silk cocoons by spending ₹2,00,000 and got ₹3,75,000 on sale of Silk Cocoons to Silk Co-operatives. Based on the above information, answer the following MCQ no. 1 to 3:
Sub-questions (3)
Which of the following statements is correct regarding Mr. Ananth's income from agricultural activities?
(A) Paddy Income of ₹4,00,000 alone is exempt as Agricultural Income.
(B) Sugarcane Income of ₹ 3,50,000 and Paddy income of ₹ 4,00,000 will constitute as Agricultural Income.
(C) Sale of Mulberry leaves amounting to ₹ 75,000, Paddy income of ₹4,00,000 and sugarcane income of ₹ 3,50,000 will all constitute Agricultural Income.
(D) Paddy Income of ₹4,00,000, Sugarcane Income of ₹3,50,000 and sale & use of Mulberry leaves of ₹ 1,25,000 all will constitute Agricultural Income.
Which of the following statements is correct regarding the nature of Mr. Ananth's income from Mulberry and Silk Cocoons?
(A) The Sale of Mulberry leaves of ₹75,000 will not constitute as Agricultural Income.
(B) The amount of ₹3,75,000 being sale proceeds of silk cocoons to Silk co-operatives will constitute as Agricultural Income.
(C) Net Income from Production of Silk cocoons of ₹1,75,000 is exempt from tax being Agricultural Income.
(D) Net Income from sale of Silk Cocoons amounting to ₹ 1,25,000 will not be treated as Agricultural Income and will be taxed either as Business Income or IFOS.
Which of the following statements correctly summarizes Mr. Ananth's agricultural and non-agricultural income?
(A) Entire amount of Agricultural Income of Mr. Ananth will be ₹ 12,00,000.
(B) Agriculture Income will be ₹ 8,25,000 whereas Gain on Sale of Silk Cocoons amounting to ₹ 1,25,000 will be Non-Agriculture Income.
(C) Agriculture Income will be ₹ 8,75,000 whereas Non-Agriculture Income will be ₹ 1,25,000.
(D) Since Mr. Ananth mixes agriculture activities with non-agriculture activities the entire receipt of ₹ 12,00,000 will be treated as Non-Agriculture Income.