1968 (8) TMI 39

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..... ting them to buildings which were actually let out and from which rent was actually realised ? " The assessee is the Plantation Corporation of Kerala Ltd., which is a company formed for the purpose of carrying on agricultural activities. For the assessment year 1964-65 the assessee returned a net loss of Rs. 47,297. The assessee owns a number of buildings used for the occupation of its employees engaged in planting. In computing the above amount of loss the assessee showed an income of Rs. 1,669 by way of rent of buildings occupied by some of its employees and claimed a sum of Rs. 47,614 on account of depreciation and an amount of Rs. 6,136 on account of repairs for all its buildings. The Income-tax Officer held that the rent received by t .....

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..... benefit of the land from which the agricultural income is derived ; ...... (j) any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of deriving the agricultural income ; ...... (l) in respect of depreciation of buildings, machinery, plant and furniture which are the property of the assessee and are required for the purpose of deriving the agricultural income, a sum equivalent to such percentage on the written down value thereof as may in any case or class of cases be prescribed and where the buildings have been newly erected or the machinery or plant newly installed a further sum subject to such conditions as may be prescribed : .....

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..... the case of deductions claimed under clauses (d) and (l) of section 5. We think that he is right. Section 12 of the Act provides for carrying forward of a loss in agricultural income in any year to the following year and for set off against the agricultural income of that year. The loss may occur when the expenditure exceeds the income derived and also when there is no income but only expenditure. Lord Thankerton in Hughes v. Bank of New Zealand said : " Expenditure in the course of the trade which is unremunerative is none-the-less a proper deduction if wholly and exclusively made for the purposes of the trade. It does not require the presence of a receipt on the credit side to justify the deduction of an expense. " The same principle .....

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