TMI Blog1980 (1) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... (respondent herein): "Whether, on the facts and in the circumstances of the case, the legal expenses incurred for defending the title to the properties of the appellant-company are allowable deductions in computing the agricultural income under the Agricultural Income-tax Act ? " The assessment years concerned are 1968-69, 1969-70, 1970-71 and 1971-72. The respondent, M/s. Bombay Burmah Trading Corporation Ltd., is an assessee on the file of the IAC of Agrl. I.T. (Special), Calicut. While computing the income of the assessee for the aforementioned four assessment years, the assessing authority refused to allow the assessee's claim for deduction of certain charges incurred by way of legal expenses, etc., for the protection of a part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said expenditure having been incurred for protecting the company's title to its landed property the assessee was entitled to be granted a deduction in respect of the said amounts notwithstanding the fact that the property which was sought to be protected was uncultivated forest land. The Tribunal accordingly upheld the claim of the assessee for the deduction of the legal charges and other expenses incurred under the aforementioned heads for all the four years. Thereafter, the Tribunal has made these references to this court at the instance of the revenue. It is common ground before us that the claim for deduction in respect of all the four years is made by the assessee only, under cl. (j) of s. 5 of the Act. Under the said clause in com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been claimed by the assessee for the three assessment years 1969-70 to 1971-72 was incurred for the protection of certain uncultivated forest lands belonging to the assessee from being encroached upon by strangers. Those lands being uncultivated lands yielding no agricultural income whatever, we are unable to find any proximate connection between the incurring of the said expenditure and the deriving of any agricultural income by the assessee. It is not, therefore, possible to say that the said expenditure was laid out or expended wholly and exclusively for the purpose of deriving the assessee's agricultural income and hence the assessee is not entitled to claim a deduction in respect thereof under s. 5(j) of the Act. The view taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee for the deduction of the expenditure incurred by it under the aforementioned two heads during the accounting period relevant to the assessment year 1968-69 was admissible under s. 5(j) of the Act. In the result, we answer the question raised in I.T.R. No. 40 of 1979 in the affirmative, that is, in favour of the assessee and against the department and in I.T.R. Nos. 41 to 43 of 1979, the question will stand answered in the negative, that is, against the assessee and in favour of the department. The parties will bear their respective costs. A copy of this judgment, under the seal of the court and the signature of the Registrar, will be forwarded to the Tribunal, as required by law. - - TaxTMI - TMITax - Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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