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Disallowed items of expenditure claimed by assessees for agricultural income derived from coffee plantations for the assessment year 1982-83. Analysis: The judgment addressed the grievance of the assessees regarding the disallowance of various items of expenditure claimed by them as being incurred wholly and exclusively for the purpose of the land from which the agricultural income was derived. The lands owned by the assessees were coffee plantations, and the income from the sale of coffee was not disputed as it was received from the Coffee Board. The Assessing Officer disallowed amounts claimed under different heads like cultivation expenses, pulping expenses, manuring, spraying, office expenses, travelling expenses, and depreciation, stating that the claims were excessive. Additionally, a part of the pruning and manuring expenses was disallowed due to perceived excessive claims compared to previous years. The judgment referred to legal principles established by the Supreme Court and previous court decisions regarding the reasonableness of expenditures claimed by assessees. It emphasized that assessing authorities should accept accounts unless there is evidence that the expenditure claimed was unreal or not incurred wholly and exclusively for the land's purpose. The Tribunal upheld the disallowance of certain amounts based on doubts regarding the recorded expenses' extent, referencing past records and neighboring landowners' expenses. The judgment highlighted the necessity for authorities to specify which items of expenditure were unreal or not wholly and exclusively applied for the land. It discussed the practice of Assessing Officers to disallow a portion of expenditure as a percentage based on the nature of the business and income-expenditure records. However, it emphasized that authorities must specify unreal items when challenged by assessees. The judgment concluded that while audited accounts must be filed, they are subject to verification, and authorities have the discretion to scrutinize and disallow excessive claims. In the final decision, the court set aside the orders of the Tribunal, appellate authority, and Assessing Officer, remanding the matters to the Agricultural Income-tax Officer for a fresh assessment. The Officer was directed to re-examine all deductions claimed by assessees with reference to vouchers and documents produced, ensuring a fair assessment process. The assessees were not allowed to introduce new records not previously submitted to the authorities.
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