KUNJAMMA MATHAI Vs. STATE OF KERALA

JUDGEMENT

(1.) The question raised in this Revision Petition filed under 78 of the Agricultural Income-tax Act, 1991 is as to whether the assessee is entitled to deduction of sales tax paid on sale of rubber trees in the computation of agricultural income.

(2.) Petitioner has relied on the decision of the Supreme Court in SIVAKANTAPPA'S CASE, 204 I.T.R. 349 and R.G.A. BAKER'S case, 116 I.T.R. 570 and contended that claim is allowable under clause (l) of Section 5 of the AIT Act as it is similar to Section 37 of the Income-tax Act.

(3.) The next question to be considered is whether sales tax paid on the sale of timber can be allowed under residuary clause, namely, clause (l) of Section 5 of the Act. No doubt the Supreme Court has consistently held that this provision of the AIT Act is similar to Section 37 of the Income Tax Act which is a residuary entry providing for deduction of business expenditure. However, resort can be had to residuary clause only when the item of expenditure is not specifically enumerated in the statute. In other words, when the item is specifically provided for in any of the other provisions of the statute, deduction has to be claimed subject to limitations provided therein. In this particular case, we find the claim of deduction is nothing but sales tax paid which is specifically covered by Section 5(o) (ii) of the Act which provides for deduction of sales tax only when it is payable for the crop sold out of which agricultural income is derived. In other words, sales tax payable in respect of any other commodity cannot be allowed as a deduction. As already stated, sales tax paid by the petitioner is not on latex that is agricultural crop but on the rubber wood, that is timber, sold after extraction of latex. If we allow the claim under residuary clause (l) above, we feel the same will go against section 5(o)(ii) which is certainly not the intention of the Legislature. In other words, we are of the view that the sales tax which could be allowed in the computation of agricultural income is the tax payable only on the sale of crop and not on anything else. In this view of the matter, we uphold the order of the Tribunal and reject the Revision Petition.