TMI Blog1997 (8) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany of its head office situated at Kerala State : the company's estate measuring 128494 acres being situated in Velimalai Village, Nagercoil District; a sum of Rs. 27,435.53 alleged to be the repair charges of the vehicles in respect of which proper records had not been filed; a sum of Rs. 4,977.20 being the alleged expenditure on postage and telegram; that amount have been disallowed on the ground of personal use; a sum of Rs. 1,532.35 being the amount of interest paid on overdraft disallowance on the ground that the loan and the purpose for which loan had been obtained had not been made available; a sum of Rs. 1,053 being the expenditure said to have been incurred for meeting the Rubber Board officials who had come to the estate to giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holly and exclusively for the purposes of raising the crop. It was also observed that the provision for deduction considered in that case was not to be construed in a narrow and pedantic sense but must be given its full effect in the background of modern large scale farming and the organisation required for it. The apex court in the case of Sassoon J. David and Co. P. Ltd. v. CIT [1979] 118 ITR 261, dealt with the expression "wholly and exclusively" used in section 10(2)(xv) of the Indian Income-tax Act, 1922. The court held that the expression does not mean "necessarily" and that ordinarily, it is for the assessee to decide whether any expenditure should be incurred in the course of his or its business and further that if such expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also expenses which are not directly incurred for deriving agricultural income, but have been expended in connection with the lands which do not have any relationship to the agricultural income derived in the previous year, if the expenses are reasonably connected with the holding of the land and using it for the purpose of agriculture. The law laid down by the apex court in relation to section 10(2)(xv) of the Indian Income-tax Act, 1922, is equally applicable to section 5(e) of the Tamil Nadu Agricultural Income-tax. This provision has to be broadly construed. As pointed out by the Supreme Court in Purtabpore Co. Ltd. v. State of U. P. [1970] AIR 1970 SC 1578, all expenses which are reasonably connected with the land are deductible. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Tribunal on the ground that "the assessee is not shown to have filed proper records, for such huge raise of expenditure under this head". The disallowance has been properly made and shall stand undisturbed. The assessee's claim for deduction of a sum of Rs. 4,977.20 being the expenditure for the postage and telegrams has been disallowed on the ground that it must have been for personal use. The assessee is a limited company and there is hardly any scope for assuming that there was personal use of stamps bought by the company. There was no evidence before the Tribunal regarding any personal use. The assessee is entitled to the deduction of the amount spent on postage and telegrams, as the fact that such expenditure had been incur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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