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TMI Blog1980 (12) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... period was 17th Aug., 1976 to 16th Aug., 1977. The appellant disclosed income upto 30th April, 1977 in respect of his "share" from the properties held as 'tenants-in-common'. From 1st May, 1977 onwards the appellant disclosed income from land which fell to his share. The Agrl. ITO made various additions in computation of income, and disallowed some expenses. 3. The assessing authority made such additions to the entire combined property viz., (1)Nagamony Sastha and 3 others(2)Nagamony Sastha Bros., upto 30th April, 1977 and adopted the proportionate share of each member. It is common ground that a reduction in income of the property will result in corresponding reduction of each member who has filed a separate here. 4. In this appeal the appellant disputed some of the additions. The ld. Authorised Representative for the appellant reiterated the arguments already raised in the grounds of appeal. The ld. State Representative relied on the orders of the lower authorities. 5. We have heard both sides and perused the connected records. 6. The first point of dispute is about the disallowance in Nagamony Sastha and others. The disallowance of interest is Rs. 28,167. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "What s. 5(k) requires is that the borrowed amount should have been actually spent on the land". This has been explained as "for any agricultural or horticultural purposes or any purpose subservient thereto". 9. The above observations clearly point out that if s. 5(k) applies to certain interest charges, the application of s. 5(e) would be automatically excluded. We are therefore unable to accept the contention that any amount not allowed under s. 5(k) should be considered under s. 5(e). We find from the statement filed by the learned Authorised Rep. that the major portion of the loan is only for agricultural purposes; such as weekly wages, sundry agricultural expenses etc., etc and these considered only under s. 5(k), we have now extracted a few items. S. No. Name Date Amount Purpose of borrowal (1) (2) (3) (4) (5) 1. M. Ramachandran 9-10-72 6,000 Funds diverted to business own by the brothers. 2. S. Ramasubramoniam 3-11-72 15,000 Tax payments of the partners 3. S.Kumaravelu Pillai 18-7-73 15,000 Diverted to busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7th April, 1977 bills were sent only between 19th Aug., 1977 to 27th Dec., 1977. The point made out is that it is only when the doctor made the bills and communicated that the assessee would be in a position to make the claim. We find considerable force in the submissions made on behalf of the appellant. It cannot be disputed that it is only when a doctor sends the bill, the patient will be in a position to pay the amount. Hence merely because the payment related to the treatment of the earlier year it cannot be disallowed. There is no dispute otherwise about the genuineness of the claim. We, therefore, direct that the entire sum of Rs. 62,688.20 must be allowed. (Relief Rs. 31,344). 12. Elephant chasing expenses: Rs. 3,251 It is contended on behalf of the appellant that the expenditure claimed under this head is a regular head of incurred year after year for preventing wild animals from entering the fields and damaging the crops and the expenses were in the form of wages to watchmen. It is pointed out though the nomenclature is "elephant chasing" it is mainly to ward off any stray animals and is regularly paid to the watchers. The expenses incurred are towards wages Rs. 3,052,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r) (Commissioner of Income-tax, Kerala vs. Kerala Nut Food Co.); (1976) 102 ITR 803 (Ker) (High Land Produce Co. Ltd. vs. CIT) and 1976 CTR (All) 6 : (1978) 112 ITR 1038 (All) (Swadeshi Cotton Mills Company Limited vs. ITO, Special Circle 'A' Ward, Kanpur) held as under: "...In a case like this where the amount is claimed with reference to an earlier period, one view is that which commanded itself to the Kerala High Court viz. that the liability referable to the particular year alone can be allowed as deduction. The other view is that the liability having been imposed under a particular statute, which came to be passed in a particular year, the assessee should be in a position to claim the amount in respect of the earlier period of the service of the employees to whom the gratuity would have to be paid. In such a case a reserve is created to cover the earlier liability which was imposed by the statute, suddenly as it were, then to the extent of the reserve so created, on the basis of an actuarial valuation, there could be a claim for deduction by the assessee. The assessee would be faced with a liability to meet which it would have no funds. In such a case, an initial setting apa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee wanted an opportunity to make an actuarial valuation and for this purpose he wanted the matter to be sent back to the Tribunal. It is not possible to accept this contention. Nothing prevented the assessee from making an actuarial estimate in time. In the absence of a proper explanation why this could not be done, we do not consider that this is a fit case in which the remand can be made". 15. These observations are against the case made out for the appellant. Besides this deduction is claimed in the course of the closure of the business run as combined property till 30th April, 1977 and not in the course of carrying out the business. Hence on any account, the appellant is not entitled for a higher deduction. There is no case for any relief. 16. The next contention is about the additions of estimated yield of rubber. The addition made was Rs. 1,74,463-68. The ld. Authorised Representative submits that the yield had all along been accepted in the earlier years. It is further urged that the yield adopted for the year in the assessment of both the combined properties and the individual assessments far exceeded the average rate of yield admitted and accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouble crop wet land at 20 quintals per acre 259.35 quintals at Rs. 113 per quintal and the total addition was Rs. 43,595-40. Similarly he estimated nuts from cocoanuts 52,460 nuts per year as in previous year; for 8 1/2 months estimated nuts 37,160 at Rs. 100 per nuts and made the required addition. As regards expenditure the Agrl. ITO restricted it to Rs. 600 per acre on the double crop wet land and expenses for cocoanut garden etc. was allowed upto Rs. 6415-45. The net income computed was Rs. 64,888-95 and apportioned to the various sharers. 20. As regards estimate of paddy the ld. Authorised Representative submitted that there is an arithmetical mistake inasmuch as for 17.29 acres yield estimated at 20 quintals per acre would be 345.8 quintals only and not 386 quintals as mentioned in the assessment order. As regards rate adopted this is said to be very high as the rates are lower in producing centres. The ld. State Representative submitted that the rate adopted was the prevailing rate on the basis of an average figures taken in Kaynyakumari District. He therefore supported the additions. 21. We find that so far as paddy yield is concerned, there is some arithmetical mistake ..... X X X X Extracts X X X X X X X X Extracts X X X X
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