OUCHTERLONY VALLEY ESTATE (1938) LTD Vs. STATE OF MADRAS REPRESENTED BY THE COMMISSIONER OF AGRICULTURAL INCOME-TAX, BOARD OF REVENUE

JUDGEMENT

(1.) The Ouchterlony Valley Estates (1938), Limited, Kozhikode, the petitioner in T.C. No. 95 of 1959 owns coffee and tea plantations in Gudalur. In computing the agricultural income-tax payable by them under Madras Act (V of 1955) for the assessment year 1957-58 they claimed the following, among other reliefs. (1) the sum of Rs. 5,849 representing sale-proceeds of the coffee crop relating to the year 1951-52 and received during the year ended 31st March, 1957, ought not to be included as part of the agricultural income of the accounting year (1st April, 1956 to 31st March, 1957), (2) the sum of Rs. 58,132 described as replanting expenses ought to be allowed as deduction in computing the total income, (3) depreciation allowance of the coffee machinery for the whole year.

(2.) The Agricultural Income-tax Officer, Gudalur, held that the sum of Rs. 5,849 representing sale-proceeds of crop relating to the season 1951-52 was properly included in the income of the accounting year, that towards replanting expenses,, an expenditure of Rs. 15,923 can be properly allowed but the balance amounting to Rs. 42,199-51 nP. cannot be allowed and that depreciation on the coffee machinery can be allowed only for six months a year. On this basis the assessee's income was computed by the Officer. The assessee preferred an appeal to the Assistant Commissioner of Agricultural Income-tax, Ootcacamund and reiterated the grounds urged by them before the Agricultural Income-tax Officer. The Appellate Authority agreed with the Agricultural Income-tax Officer in holding that the sum of Rs. 5,849 was includable in the years income. On the question of deduction of replanting expenses, the Appellate Authority took the view that the Income-tax Officer granted greater relief to the assessee than what they were entitled to. He issued notice to the assessee to show cause why the order of the Income-tax Officer should not be varied in this behalf and after hearing the assessee reached the conclusion that only a sum of Rs. 400 spent by the assessee for replanting 5 acres during the year in question can be allowed and the balance of Rs. 57,732-3-7 cannot be allowed. The Appellate Authority also granted depreciation allowance restricted to a period-of six months for the year. The assessee preferred a further appeal before the Madras Plantations Agricultural Income-tax Appellate Tribunal and urged for the granting of the reliefs pressed for by them before the Agricultural Income-tax Officer and the Assistant Commissioner of Agricultural Income-tax. The Tribunal following the decision of this Court in W.P. No. 749 of 1956 confirmed the inclusion of the receipts of the crop of the year 1951-52 in the years income. In regard to-replanting expenses, the Tribunal held that the assessee was entitled to expenses, for replanting an extent of 21/2 per cent, of the total area of plantation, namely, 74 acres, that the normal replanting expenses would amount to Rs. 700 per acre and on this basis allowed an expenditure of Rs. 51,800 and disallowed the balance claimed by the assessee. The Tribunal however held that the assessee was entitled to full depreciation allowance on the coffee machinery and granted that relief to. the assessee.

(3.) T.C. No. 95 of 1959 has been preferred by the assessee against the order of the-Tribunal in so far as it is against them and T.C. No. 127 of 1959 has been preferred by the State against the same order in so far as it is adverse to the revenue.