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TMI Blog1972 (9) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... Agricultural Income-tax Officer, Coonoor. This disallowance was confirmed by the Assistant Commissioner of Agricultural Income-tax, Ootacamund and the Tribunal. The items of expenditure in question for the assessment years 1963-64 and 1964-65 are as follows : 1. Subscriptions paid to Ross Institute of Tropical Hygiene and the Sports Club of UPASI. 2. Secretarial and general charges of the company. 3. Legal expenses incurred in connection with the various matters relating to the day-to-day carrying on of the business of the company. For the assessment year 1963-64 under the heading " General and secretarial charges " the assessee claimed three items of deductions : 1. Purchase of a book called " Introduction to Investor " . 2. Subscri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revious year (not being in the nature of a capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of the land." The majority view of the Tribunal was that the expression " for the purpose of the land " is narrower in its scope than that of the expressions " the land from which the agricultural income is derived " or " the benefit of the land from which the agricultural income is derived " which are found in some of the sub-sections in section 5 itself and that, therefore, unless the expenditure is " directly connected " and " closely related ", the expenditure cannot be brought under section 5(e). This view of the Tribunal is sought to be supported by the learned counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as " laid out or expended for the purposes of deriving agricultural income ". The Supreme Court reversed the decision of the High Court and held that the expenses incurred on the upkeep and maintenance of the whole estate including the immature rubber plants would also come within the purview of the expression " laid out and expended wholly and exclusively for the purpose of deriving the agricultural income ". In Commissioner of Agricultural Income-tax v. Calvary Mount Estates Ltd. the Supreme Court considered the scope of section 5(e) of the Madras Act. In that case also the expenses that were the subject-matter of dispute were incurred in forking and manuring of the non-bearing and immature rubber plants grown in the estate. The Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Agricultural Income-tax v. Tipperary Estates Co., a Division Bench of this court, to which one of us was a party, has held that the payments made to a partner for services rendered to the partnership de hors a partner is an allowable deduction under section 5(e) on the ground that such payments come under the expression " expenditure laid out wholly and exclusively for the purpose of the land ". These decisions show that the expression " for the purpose of the land " covers a wide range of expenses taking in not only the expenses incurred actually for deriving agricultural income but also expenses which are not directly incurred for deriving agricultural income but expended in connection with the lands which do not have any r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to continue the appointment of selling agents and managing agents. These items of expenditure have to be incurred in the course of the carrying on of its activity as the owner of the estate and therefore, they are allowable deductions. But the expenditure incurred in connection with the Mahajan's suit challenging the election of Srinivasan as a director, is in the nature of a personal dispute between the said Mahajan and Srinivasan. Though Srinivasan was a director, no expenditure could be incurred by the company in connection with this election and the expenditure has nothing to do with the estate as such. That expenditure will, therefore, have to be disallowed. We accordingly hold that except the expenses relating to the suit of Mahaja ..... X X X X Extracts X X X X X X X X Extracts X X X X
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