TMI Blog1989 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellate Tribunal-one was at the instance of the assessee, and the other, at the instance of the Revenue. From the common order passed in the said two appeals dated June 29, 1984, the Revenue as well as the assessee got referred the following questions of law for the decision of this court: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that no capital gains arose to the assessee by the sale of 2,749 old rubber trees from the rubber estate of the assessee ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that no tax on capital gains was attracted in respect of the trees standing on a rubber estate sold by the assessee ? (3) Whether, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sale of old and unyielding rubber trees. The Appellate Tribunal also held that in a case where the rubber estate was sold with trees, there can be no assessment of capital gains attributable to the sale of the trees. The rubber replantation subsidy was held to be not a revenue receipt. While holding these three points (questions) in favour of the assessee, the Tribunal held that the surtax payable by the assessee cannot be allowed as deduction in computing the business profits of the assessee. It is from the above order of the Appellate Tribunal deciding the first three questions against the Revenue, that the Revenue has got them referred to this court. It is the fourth question, which was decided against the assessee, that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held that no tax on capital gains can be levied with regard to the capital gains notionally calculated in respect of the trees standing on the rubber estate. This has been held so by a Bench of this court in CIT v. Alanickal Co. Ltd. [1986] 158 ITR 630. In this view, we answer question No. (2) in the affirmative, against the Revenue and in favour of the assessee. A Full Bench of this court in CIT v. Ruby Rubber Works Ltd. [1989] 178 ITR 181 (Ker) [FB] has held that rubber replantation subsidy received by a planter is not liable to be included in the taxable income. It is not a revenue receipt. In the light of the Full Bench decision, we answer question No. (3), referred to us at the instance of the Revenue, in the affirmative, against t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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