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TMI Blog1964 (8) TMI 81X X X X Extracts X X X X X X X X Extracts X X X X ..... on 10(2)(vi b) of the Indian Income-tax Act, 1922 ? " The assessee, the Ouchterlony Valley Estates (1938) Limited, is engaged in the cultivation of tea and coffee. It contended that it was entitled to development rebate in respect of certain assets which were used not merely in the cultivation of tea but also in the cultivation of coffee. The contention was upheld by the Appellate Tribunal and the question mentioned above was referred to this court in pursuance of an application by the Commissioner of Income-tax, Kerala, Ernakulam. In order to earn the rebate the conditions provided by section 10(2)( vi b) of the Indian Income-tax Act, 1922, have to be fulfilled. Sub-section (1) of section 10 says that income-tax shall be payable by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such income shall be deemed to be income, profits and gains liable to tax" under the Indian Income-tax Act, 1922. There is no similar provision regarding coffee; and as a result income derived from the sale of coffee grown and manufactured by the seller in the taxable territories has to be considered as agricultural income exempt from taxation under that Act. The contention of the department is that the income from the coffee cultivation of the assessee being only agricultural income without any statutory provision directing that income to be considered as an income from business, the user of the assets concerned in the earning of that agricultural income also, will negative the claim for rebate under section 10(2)(vi b) of the Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that they were used in the cultivation of coffee. It is also agreed that if those assets were left idle when they were not being used in the cultivation of tea, then the rebate would have been admissible. What disentitles the rebate, according to the department, is only the use of the assets in the cultivation of coffee or, in other words, the disruption of the exclusive character of the user in the cultivation of tea. In these circumstances-the assets being used in their entirety in the cultivation of tea-we are not prepared to say that the Tribunal was wrong in the conclusion that it reached, and must answer the question referred in the affirmative, that is, in favour of the assessee and against the department. We do so, but without any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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