SARASWATHI ESTATE Vs. COMMISSIONER OF AGRICULTURAL INCOME TAX

JUDGEMENT

(1.) THE assessee, which is a partnership firm is the petitioner before us in this civil revision petition preferred under Section 55(1) of the Karnataka Agricultural Income-tax Act, 1957 ("the Act" for short).

(2.) THE assessment year in question is 1989-90, relevant for the accounting year ended on March 31, 1989. Though normally the financial year starting from the 1st April of the year and ending with the 31st of March succeeding year is the period of the accounting year, in the instant case, it appears it was of a longer duration. In view of the fact that the period of accounting year was sought to be standardised, to be the 12 months of a financial year with effect from the assessment year April 1, 1989, and as the petitioner-assessee had been following an accounting period other than the accounting year as its previous year during the earlier years, and in view of the transaction brought about with effect from April 1, 1989, the previous year of the assessee with reference to this assessment year comprised a larger period, namely, from July 1, 1987 up to March 31, 1989, i.e., a duration of 21 months, THE subject-matter of dispute between the assessee and the respondent-Revenue is the levy of penalty in a sum of Rs. 1,00,517 levied under Section 22(1)(d) of the Act. THE subject-matter of this revision petition is also the legality or otherwise of this penalty.

(3.) THE significant contents as disclosed from the return filed by the assessee were, while the return as such only indicated the figure of Rs. 70,12,091.25 to be the loss for the relevant period and absolutely nothing else, a very brief statement of agricultural income which had been appended to the return indicated that the income from cardamom was Rs. 22,23,156.75, income from pepper was Rs. 2,28,752 and by adding the two, the total income was shown at a sum of Rs. 24,51,908.75. An amount of Rs. 94,64,000 was shown as cultivation expenditure for the accounting period of 21 months resulting in a net loss of Rs. 70,12,091.25. THE statement also indicated the names of the partners Sri K. L. Ananthapadmanabha and Sri K. L. Swamy. It is further mentioned that the payment of a sum of Rs. 11,48,306 has been made to the bank towards interest. Certain copies of bank statements have been appended presumably for justifying the claim for payment of interest.