SHEVEROY ESTATES LIMITED Vs. GOVERNMENT OF MADRAS

JUDGEMENT

(1.) These are appeals by certificate by a common assessee. In this case we are concerned with the assessment under the Madras Agricultural Income-tax Act, 1955 (hereinafter to be referred to as the Act) , The relevant assessment years are 1955-56 and 1956-57, the previous years ending on 31/03/1954, and M 31/03/1955. The assessee was maintaining his accounts according to the mercantile system. The only question in dispute in this case is as regards the method of computation of the agricultural income of the assessee.

(2.) In assessing the income-tax of the assessee for the assessment year 1955-56, the very first assessment year under the Act, the department took into consideration certain stocks of coffee which it had gathered earlier than 1/04/1954, but sold during the financial year 1954-55. The contention of the assessee was that' the department was not entitled to do so. It was contended on behalf of the assessee that only the crop gathered in the financial year 1954-55 and sold during that period could be taken into consideration for purposes of the assessment. This contention was rejected by the authorities under the Act as well as by the High court. Aggrieved by that decision, the assessee has come up in appeal to this court.

(3.) The point in issue in this case is, in our opinion, concluded by two decisions of this court, namely, State of Kerala v. Bhavani Tea Produce Co. Ltd. , and S. S. Rajalinga Raja v. State of Madras. These decisions have laid down that in the application of the Act what is relevant is the agricultural income realised during the relevant previous year, the question as to when the crop was gathered being wholly immaterial. This court has held that even if the produce had been realised prior to 1/04/1954, but if the same had been sold subsequently, the price realised by the sale either under the mercantile system or under the cash system is assessable in the year in which the price was either deemed to have been realised or was actually realised depending on the system of accounting maintained by the assessee. In view of the ratio of those decisions the contention of the appellant-assessee that the department should not have taken into consideration the produce gathered prior to 1/04/1954, but sold subsequently cannot be sustained.