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Petitioner seeks to quash proceedings confirming impugned orders related to tax assessment under the Tamil Nadu Agricultural Income-tax Act. The main issue is the allowance of expenditure claimed under "Head Office expenses" for retirement gratuity in the computation of coffee income. The second respondent proposed to revise the assessment order due to an alleged mistake in allowing the gratuity amount. The key question is whether provision for gratuity is allowable under section 5(e) of the Act and if the powers under section 36 can be invoked in this matter. Analysis: The petitioner, an assessee under the Tamil Nadu Agricultural Income-tax Act, challenged the proceedings confirming tax assessment orders. The petitioner's estate generates income from tea and coffee, with a portion allocated to coffee income. The dispute arose when the second respondent proposed to revise the assessment order, claiming a mistake in allowing the retirement gratuity amount as a deduction. The petitioner argued that provision for gratuity is allowable under section 5(e) of the Act and that the powers under section 36 cannot be invoked in contentious matters. The respondents contended that the net income from coffee estates is determined solely by the Agricultural Income-tax Officer, who has the authority to allow or disallow related expenditures. They argued that provision for gratuity does not fall under section 5(e) unless a trust fund for gratuity had been formed before a specific date. The respondents invoked section 36, claiming a mistake apparent on the face of the records, to revise the assessment order. In analyzing the provisions of the Act, the court referred to section 5(e) and compared it to section 37(1) of the Income-tax Act. The court cited precedents from other High Courts and the Supreme Court to establish that provision for gratuity is an allowable expenditure under section 5(e) of the Act, irrespective of the formation of a trust fund. The court emphasized that no provision similar to section 40A(7) of the Income-tax Act exists in the Act, making the invocation of powers under section 36 unnecessary in this case. The court concluded that the petitioner's claim regarding the allowance of expenditure towards gratuity under section 5(e) was valid. It held that the powers under section 36 were inapplicable in this contentious matter. Therefore, the court allowed the writ petition, with costs imposed on the respondents and counsel's fee awarded to the petitioner.
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