TMI Blog2004 (7) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... ems to be eligible for deduction – Petition by revenue is dismissed - - - - - Dated:- 30-7-2004 - Judge(s) : D. K. SETH., R. N. SINHA. JUDGMENT D.K. SETH J. - In this case the learned Tribunal had allowed deduction of the cess paid on green leaf in the process of growing and manufacturing tea since assessed to income-tax. According to learned counsel, 60 per cent, of the cess so paid is eligible for deduction since 60 per cent, of the income computed under rule 8 is held to be agricultural income. According to him, the cess is payable under section 8(2)(e) of the Assam Agricultural Income-tax Act, 1939. Therefore, it can be deducted only to the proportion of the agricultural income. He relies on a decision in Jorehaut Group Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent, of the income so computed shall again be required to be computed under the Agricultural Income-tax Act. On the other hand, this 60 per cent, is exposed and becomes exigible to tax under the Agricultural Income-tax Act without being required to be assessed under the said Act by reason of the fiction so created. Therefore, the cess paid has rightly been excluded while computing the income under rule 8 of the tea grown and manufactured. The Commissioner of Income-tax (Appeals) has found that the Guwahati High Court failed to consider the decision in Karimtharuvi Tea Estates Ltd. v. State of Kerala [1963] 48 ITR (SC) 83; Anglo-American Direct Tea Trading Co. Ltd. v. CA1T [1968] 69 ITR 667 (SC); Tata Tea Ltd. v. State of West Bengal [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of computing the income under the Act and only after the computation of the total income, the apportionment is to be made determining 60 per cent, as agricultural income and 40 per cent, as exigible to tax under the Act. During the process of the computation, all deductions allowable at the time of computation are to be allowed and that was rightly allowed. Inasmuch as if the income for tea grown was assessed under the agricultural income-tax, in that event, the same cess paid of green leaf would have been eligible for deduction at the time of computation of the agricultural income. But when by fiction in respect of tea grown and manufactured, the agricultural component of the income out of the tea grown is also computed under the In ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
