LAWS(KER)-1996-7-44

VANIAMPARA RUBBER COMPANY LIMITED Vs. STATE OF KERALA

Decided On July 16, 1996
VANIAMPARA RUBBER CO. LTD. Appellant
V/S
STATE OF KERALA Respondents

JUDGEMENT

(1.) THESE three tax revision cases arise from a common order of the Agricultural Income-tax Appellate Tribunal, Additional Bench, Palakkad, dated September 9, 1991. The assessment years involved are 1975-76, 1976-77 and 1977-78.

(2.) THE petitioner is a company incorporated under the Companies Act, 1956, and is carrying on business of growing and planting rubber in its estate known as "Vaniampara Rubber Estate". THE petitioner was an assessee under the Kerala Agricultural Income-tax Act, 1950 (hereinafter referred to as "the Act"), on the files of the Inspecting Assistant Commissioner of Agricultural Income-tax, Trichur. THE petitioner executed an agreement dated July 25, 1974, in favour of a purchaser to sell 13,600 old and uneconomic rubber trees from an area of about 100 acres of its estate for a total consideration of Rs. 4,08,000. Annexure "A" is a copy of the said agreement as per which the purchaser was permitted to uproot and remove the trees within a period of three years. While completing the assessments for the years in question, the Assessing Officer proposed to assess a portion of the consideration received on execution of the agreement as income from slaughter tapping assessable to agricultural income-tax. THE said proposal was objected to by the petitioner. However, after the enquiry, rejecting the contention of the petitioner, the entire income received by the petitioner during the previous year relevant to the assessment year 1975-76, viz., Rs. 81,600, was treated as agricultural income and the same was brought to tax. Likewise, a sum of Rs. 1,78,200 received during the previous year relevant to the assessment year 1976-77 and also Rs. 1,48,200 received during the previous year relevant to the assessment year 1977-78 were treated as agricultural income and assessed to tax. In the appeals filed by the petitioner, the Deputy Commissioner (Appeals) confirmed the treatment of receipt of the amount for the sale of rubber trees as income. In respect of disallowance of expenses, the Deputy Commissioner (Appeals) directed the assessing authority to reconsider the issue with certain observations. As a result of that, the impugned assessments were set aside and the cases remitted back to the assessing authority for fresh disposal according to law and in the light of the observations made therein. THE petitioner being aggrieved by the order so passed by the Deputy Commissioner (Appeals) filed appeals before the Appellate Tribunal. Before the Tribunal, there were two other appeals by the petitioner relating to the years 1973-74 and 1974-75 with which we are not concerned in these cases. THE Tribunal by a common order found that there was no evidence on record for the assessing authority to believe that all the rubber trees sold were uprooted only during the last year of the agreement, that is to say, during the previous year relevant to the assessment 1977-78. THE Tribunal did not approve the ratio of bifurcation of income adopted by the assessing authority. After considering the entire matter, the Tribunal directed 60 per cent. of the receipt to be treated as the sale value of rubber trees which is not exigible to agricultural income-tax and the balance 40 per cent. alone as income from slaughter tapping exigible to agricultural income-tax. It is against the said common order that the present revision cases are filed.

(3.) THE contention of learned counsel for the petitioner is not that there was no income from slaughter tapping after the execution of the agreement ; but such income belonged to the purchaser to whom the trees were sold. THE case being that there was income from the property, the provision should have been there in the agreement and in the absence of any provision in that regard this court cannot accept the contention that by reason of sale deriving of income from the property ceased to exist.