TEEKOY RUBBERS INDIA LIMITED Vs. STATE OF KERALA

JUDGEMENT

(1.) THE petitioner is an assessee under the Agricultural Income-tax Act. THE Revenue is the respondent. THE matter relates to the assessment year 1979-80. THE petitioner, a limited company, is carrying on business, inter alia, of rubber planting. By three agreements dated March 15, 1976, April 30, 1976, and April 20, 1977, the assessee sold some of the uneconomic rubber trees to third parties. During the accounting period relevant to the assessment year 1979-80, the assessee received a sum of Rs. 1,86,395 under the aforesaid agreements. THE assessee treated the receipts as capital receipts. THE assessing authority, however, held that the consideration received under the agreements related to sale value of rubber trees as well as income from slaughter-tapping. According to him, two-thirds of the consideration received during the year should be treated as representing income from slaughter-tapping. It was included in the agricultural income for the year and assessed to tax under the Agricultural Income-tax Act. THE order of assessment is dated October 27, 1980. It was confirmed in appeal by the Deputy Commissioner (Appeals) by order dated August 13, 1981. In second appeal, the Agricultural Income-tax Appellate Tribunal, by its order dated January 12, 1989, confirmed the inclusion of two-thirds of the total consideration received as agricultural income from slaughter-tapping. THE appeal for this year 1979-80, was disposed of along with the appeals for the years 1972-73, 1973-74, 1974-75, 1975-76, 1976-77, 1977-78, 1978-79, etc. In considering the various aspects for the assessment year 1979-80 in paragraphs 8 and 9 of the appellate order dated January 12, 1989, the Appellate Tribunal came to the conclusion that, in view of clause 5 of the agreement which shows that the purchasers under the agreement shall not have the right to assign the benefits under the contract or to resell any of the said rubber trees .while the same remains on the said estate and the further fact that the assessee did not produce any evidence to show that no .slaughter tapping had taken place, the consideration received as per the agreement was for slaughter-tapping as well as for cutting and removal of trees. THE finding of the assessing authority in this regard was confirmed. THE inclusion of two-thirds of the consideration as income from slaughter-tapping was also confirmed. THE assessee assails the said order of the Appellate Tribunal dated January 12, 1989, in so far as it relates to the assessment year 1979-80, and the inclusion of a portion of the amount received under the agreement for sale of rubber trees as income.

(2.) WE heard counsel for the assessee and also counsel for respondent, Senior Government Pleader, Shri V. C. James. Annexure-A to the paper book is one of the agreements dated March 15, 1976. It is common ground that the other agreements dated April 30, 1976, and April 20, 1977, are similar in import. Clause 5 of the agreement available at page 9 is to the following effect :

(3.) THIS revision is allowed. The Appellate Tribunal as well as the assessing authority shall give effect to this order. There shall be no order as to costs.