1973 (4) TMI 34 - HC - Income Tax

Tamil Nadu Agricultural Income Tax Act 1955 - assessee had income from tea and coffee - assessee in this case claimed a sum of Rs. 2, 000 spent as stock exchange listing fee as a deduction under the provisions of section 5(e) of the Madras Agricultural Income-tax Act

Summary

Issues:
1. Claim of stock exchange listing fee deduction under Madras Agricultural Income-tax Act.
2. Allocation of stock exchange listing fee between tea and coffee income.
3. Allowance of deduction under Madras Agricultural Income-tax Act based on deduction allowed under Indian Income-tax Act.

Analysis:
The judgment pertains to the claim of a taxpayer for a deduction of Rs. 2,000 spent as a stock exchange listing fee under the Madras Agricultural Income-tax Act for the assessment year 1966-67. The assessing authority and the Appellate Assistant Commissioner had initially rejected the claim. The Tribunal also disallowed the deduction, stating that the fee payment was not related to the earning of tea income. The taxpayer contended that a portion of the fee, specifically Rs. 1,220, was allocated to tea income and had been allowed as a deduction under the Income-tax Act. However, the actual assessment order supporting this claim was not produced before the Tribunal, leading to the rejection of the entire deduction claim.

The taxpayer argued before the High Court that the stock exchange listing fee should be allocated between tea and coffee income based on their respective ratios and that if the deduction was allowed under the Income-tax Act, it should also be permitted under the Madras Agricultural Income-tax Act. The High Court referred to a previous case where it was held that the Agricultural Income-tax Officer must assess only the portion of income left unassessed by the income-tax authorities. Therefore, if the taxpayer could establish that the fee allocation for tea income was allowed as a deduction under the Income-tax Act, it should also be allowed under the Agricultural Income-tax Act.

The High Court decided to remit the matter back to the Tribunal for fresh consideration, allowing the taxpayer to produce the necessary evidence of deduction under the Income-tax Act for tea income. The Tribunal's decision to disallow the deduction for the portion of the fee related to coffee income was upheld. The judgment concluded by setting aside the Tribunal's order, remitting the case for further review, and maintaining no order as to costs.