TMI Blog1979 (10) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 1959-60 ? 2. Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 7,462 on the construction of " Molasses Fund Quarters " is allowable as revenue expenditure ? 3. Whether, on the facts and in the circumstances of the case, the amalgamation expenses of Rs. 7,455 were allowable as a deduction in the assessment year 1959-60 ? " So far as questions Nos. 2 and 3 are concerned, we need not set out the facts relating thereto because they stand covered by a decision of this court in the assessee's own case for the assessment year 1957-58 ; whereas the assessment year involved in this reference is 1959-60 : vide Raza Buland Sugar Company Ltd. v. CIT [1978] UPTC 633; [1980] 122 ITR 817 (All). F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was of a capital nature. Coming to question No. 1, the facts found by the Appellate Tribunal are that in the erstwhile State of Rampur there were two companies, namely, Raza Sugar Company Ltd. and Buland Sugar Company Ltd. They entered into a partnership agreement in the name and style of M/s. Agricultural Company which obtained some land on lease from the Nawab of Rampur on payment of certain rent. Subsequently, these two companies were amalgamated and the present assessee-company was formed. It took over the affairs of M/s. Agricultural Company. This agricultural land was known as Matkhera Farm. The State of Rampur merged in the Indian Union in July, 1949. Till then the income from this farm was taxed as non-agricultural income under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the AAC, but remained unsuccessful. In the further appeal before the Appellate Tribunal, it was seriously urged on its behalf that the Matkhera Farm did not represent an agricultural activity of the assessee because no land revenue was payable by that date on that land. The Appellate Tribunal found that the submission made was not very correct. It found that the assess ee was a grantee of this land, on a nominal rate of rent, from the Nawab of Rampur and after the extension of the U.P. Zamindari Abolition and Land Reforms Act, 1951, to the territory of the erstwhile State of Rampur with effect from January 26, 1956, the assessee became the Sirdar of the land of this farm. It paid 10 times of the land revenue which amounted to approximatel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only serious objection which was raised on behalf of the assessee before the Appellate Tribunal was that the land of this farm was not assessed to land revenue and hence this definition of agricultural income was not applicable to it. The submission was rightly repelled by the Tribunal on the facts found by it, viz., that the land had been granted to the assessee's predecessor by the Nawab of Rampur on favourable rate of rent and after the extension of the Zamindari Abolition and Land Reforms Act, to the territories of the erstwhile State of Rampur with effect from January 26, 1957, the assessee became the Sirdar of this land and it actually obtained Bhumidhari rights after depositing 10 times the revenue payable for this land. It has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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