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2021 (10) TMI 1371 - HC - Income TaxAssessment of Agricultural income - income received from the sale of rubber was subjected to tax under Kerala Agricultural Income Tax Act 1950 ('KAIT Act') - re-plantation expenses are considered as capital expenditure and the expenses incurred by the assessee for upkeep and maintenance of newly planted rubber trees are in the nature of revenue expenditure, for mere plantation of rubber trees, the assessees do not earn income, but the income is derived only from proper upkeep and maintenance of trees - HELD THAT:- The scope and extent of the operation of Rule 7A, which is similar to Rule 8(2), with regard to allowance for replanting expenses and deduction towards upkeep and maintenance expenses of immature plants in computation of income from rubber under the provisions of the Act and Rules need an authoritative pronouncement from this Court. Revenue, argues that there is no need or necessity for reconsideration of Rehabilitation Plantations Ltd. case [2012 (6) TMI 570 - KERALA HIGH COURT] by the Full Bench, Accordingly to Revenue, it is for the Supreme Court, if necessary, to lay down law in this behalf. We are not persuaded with the objection stated by the Revenue. Firstly, Rehabilitation Plantations Ltd. has not taken note of the judgments referred to above in Travancore Rubber & Tea Co. Ltd. [1960 (12) TMI 15 - SUPREME COURT] and Karimtharuvi Tea Estates Ltd. [1962 (11) TMI 44 - SUPREME COURT]. Rule 7A(2) juxtaposed with Rule 8(2) and the case law on the point under KAIT Act would demonstrate that the applicable provisions of law and the precedents on the point are not adverted to by the Division Bench. The claims of assessees are rejected by referring to the view taken in Division Bench judgment. We refer the following question for consideration by a Full Bench of this Court, subject to the orders of Hon'ble The Chief Justice: “Whether the assessee/Plantation Companies under Rule 7A(2) of the Rules are entitled to an allowance towards replanting expenses and a further deduction towards upkeep and maintenance expenses incurred by the assessee for the immature plants till the age of maturity in the computation of income under the Act and Rules.” In our considered view the issues are of regular occurrence for all the plantation owners and the question needs an authoritative pronouncement from a Full Bench of this Court.
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