STATE OF MADRAS Vs. G J COELHO

JUDGEMENT

(1.) The respondent, hereinafter referred to as the assessee, purchased an estate in 1950, known as Silver Cloud Estate, consisting of tea, coffee and rubber plantations, in Gudalur Nilgiris, Madras State. Out of the sale price of Rs. 3,10,000/-, he borrowed Rs. 2,90,000/-, at interest varying from seven to eight per cent, per annurn. For the assessment year 1955-56, the assessee claimed to deduct interest on this sum, amounting to Rs. 22,628/9/8. The Agricultural Income-tax Officer, Gudalur, disallowed Rs. 21;057/15/1, allowing Rs. 1,570/10/l, under S. 5 (k) of the Madras Plantations, Agricultural Income tax Act (Madras Act. V of 1955), (hereinafter referred to as the Act). The relevant part of the assessment order is reproduced below:

(2.) The assessee appealed to the Assistant Commissioner of Agricultural Income-tax, without success. He then appealed to the Madras Plantations Agricultural Income-tax Appellate Tribunal hereinafter referred to as the Tribunal. The Tribunal observed as follows:

(3.) The assessee filed a revision application to the High Court under S. 54(1) of the Act, and raised the following question below it: