9911796707
TMI Blog1965 (10) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... a tax of Rs. 45,443-1-0 was demanded by the department and in the succeeding assessment year, corresponding to the previous year ended on March 31, 1956, the amounts of net agricultural income and the tax were respectively Rs. 1,14,339 and Rs. 42,810-5-0. The assessee-company claimed that Rs. 97,090 in the first year and Rs. 10,095 in the second year were not taxable although received by the company from the Coffee Board during the relevant accounting years. The company contended that these payments were in respect of coffee delivered by the company to the Coffee Board under section 25 of the Coffee Market Expansion Act, 1942; in the years 1952-53 and 1953-54, that is to say, prior to April 1, 1954, when the Madras Plantations Agricultural Income-tax Act came into force and were not assessable, as the accounts were maintained on the mercantile system and the amounts were shown in 1952-53 and 1953-54. This plea was not accepted by the Agricultural Income-tax Officer, Coimbatore. His assessment orders are dated May 18, 1956, and July 15, 1957, respectively. The company appealed, but the Appellate Assistant Commissioner by orders passed on December 19, 1958, dismissed the appeals. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal must be considered to be right but if it is the other way, then the action of the department was correct. We shall now consider this question. Before we proceed we shall analyse the provisions of the two Acts with which we are concerned. The Madras Plantations Agricultural Income-tax Act consists of 65 sections. It is not necessary to give a full analysis of that Act. For our purpose it is sufficient to refer to some of the provisions only. Section 2 defines "agricultural income", inter alia, as any income derived from a plantation in the State and Explanation II says that agricultural income derived from such plantation by the cultivation of coffee means that portion of the income derived from the cultivation, manufacture and sale of coffee as may be defined to be agricultural income for the purpose of the enactments relating to Indian Income-tax Act. "Plantation" in the Act means any land used for growing certain crops including coffee. Section 3 lays charge of agricultural income-tax and for our purpose we need read only the first subsection. It is: " 3. Charge of agricultural income-tax.---(1) Agricultural income-tax at the rate or rates specified in Part I of the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Coffee Board is a body corporate (having perpetual succession and a common seal) with power to acquire and hold property, both movable and immovable and to contract (section 5). The Coffee Act imposes a duty of customs on all coffee produced in India and exported from India (section II) and a duty of excise on all coffee which an estate registered under section 14 is permitted, under a scheme of internal sale quota allotted to it, to sell in the Indian market, whether such coffee is actually sold or not, and on all coffee released for sale in India by the Coffee Board from its surplus pool (section 12). The proceeds of these duties (though first credited to the Consolidated Fund of India) may be paid to the Coffee Board and when so paid are credited to a General Fund (section 13). All owners of coffee estates of not less than 10 acres are required to register with a registering officer appointed in this behalf by the State Government and the registration once made continues till it is cancelled (section 14). The Central Government fixes the price or prices at which coffee may be sold wholesale or retail in the Indian market and no registered owner or licensed curer or dealerca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (when necessary) and marketing (sub-section (3)). The Coffee Board must prepare,from time to time, a differential scale for the valuation of such coffee. In accordance with that scale the Coffee Board must classify each consignment delivered for inclusion in the surplus pool and make an assessment of its value based on its quantity, kind and quality (sub-section (4)). Sub-section (5) is not material. Sub-section (6) then provides as follows :--- "25. Surplus coffee and surplus pool .---- ...... (6) When coffee has been delivered or is treated as having been delivered for inclusion in the surplus pool, the registered owner whose coffee has been so delivered or is treated as having been so delivered shall retain no rights in respect of such coffee except his right to receive the payments referred to in section 34." Section 34, which is here referred to, reads : " 34. Payments to registered owners.---(I) The Board shall at such times as it thinks fit make to registered owners who have delivered coffee for inclusion in the surplus pool such payments out of the pool fund as it may think proper. (2) The sum of all payments made under sub-section (1) to any one registered owner s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to return any part of that coffee to the producer. It only sells it and gives to the planter price proportionate to the value of all coffee in the surplus pool for that year, unless the planter settles for an immediate payment. The appellant-company maintains its accounts on the mercantile system. When it handed over coffee to the Coffee Board it entered the price of the coffee according to the valuation of the Coffee Board in its books of account although it did not receive payment immediately because as has been shown above the payment is delayed unless immediate settlement is made. The payment for coffee handed over before April 1, 1954, was received after that date. No doubt actual payment was received in the previous years relevant to the two assessment years, but coffee was handed over to the Coffee Board in the earlier years for which no tax could be demanded. Was there a sale to the Coffee Board ? The answer must be in the affirmative. The Coffee Board is neither a trustee nor even an agent of the planter. It is not accountable to the owner, except as to payment for coffee received and valued according to the differential prices. All coffee which the Coffee Boar ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
