THIRUNAMBADI RUBBER CO LTD Vs. CAIT

JUDGEMENT

(1.) THESE four references are at the instance of the assessee, and are in respect of four assessment years 1961-62 to 1964-65 (both inclusive ). The questions are: 1. Whether the sale proceeds of rubber trees sold for being cut and removed with roots for replantation for a single consideration can be separated into the value of the trees and the value of the latex that can possibly be extracted there from by slaughter tapping and whether the latter is assessable to agricultural income in the hands of the owner who sold the trees? 2 Whether the income attributed to the centrifugal process etc. is assessable as agricultural income? 3 Whether in the absence of a machinery to harmonise and reconcile the assessment and fixation of the quantum of assessable income and apportioned expenditure under the State and Central enactments, the agricultural Income Tax Department is justified in not following and ignoring the basis and assessment of the Central Income Tax Authorities and disallow legitimate expenditure apportioned to it by adapting different methods, inconsistent with and rejected by the Central Income Tax Authorities in view of art. 366 of the Constitution and whether the proper basis of apportionment is the one adopted by the Central Income Tax Authorities or the Agricultural income Tax Authorities?"

(2.) MR. T. L. Viswanatha Iyer, learned counsel for the assessee at whose instance the references were made, at the outset submitted that questions Nos. 2 and 3 have become purely academic, in that it has been held by the Income-tax authorities that the income attributable to centrifugal process etc is not assessable to tax under the Indian Income-tax Act. Regarding the income attributable to centrifugal process the assessee contended that a portion of such income has been held to be business income assessable under the indian Income-tax Act, and that therefore that such income should be exempted in computing Agricultural income. The Tribunal overruled this claim for the reason that the Income-tax Act or Rules do not warrant the assumption that such income is taxable under the Income-tax Act. Questions Nos. 2 and 3 were referred to this Court in these circumstances. In view of the submission made by the learned counsel for the assessee no answers are called for, and we decline to answer questions Nos. 2 and 3.

(3.) IN the case in hand the assessee (a company) is the owner of the land on which the rubber trees sold stood. The consideration amount received by the company in respect of the transaction has to be bifurcated, 'that pertaining to latex and that which is attributable to the value of the trees. ' The former is to suffer Agricultural INcome-tax and the latter not.