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TMI Blog1958 (3) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee) laid out or expended wholly and exclusively for the purpose of the plantation. The respondent's claim for the deduction of a sum of ₹ 20,287-4-8 in respect of the assessment year 1955-56 (accounting period: the year ending with 31st March, 1955) was negatived by the Agricultural Income-tax Officer, Tamarasseri, and then by the Assistant Commissioner of Agricultural Income-tax, Kozhikode, in the appeal filed by the respondent under section 31(1) of the Act. The petitioner subsequently moved the Agricultural Income-tax Appellate Tribunal, Trivandrum, and succeeded in the appeal. It is the correctness of the decision of the Tribunal that is challenged before us in this application by the Commissioner of Agri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntage of a permanent and enduring nature, are not allowable, but the advantage must be analogous to an asset. The deduction claimed is not in respect of planting the rubber plants but only in respect of the current expenses after they had been planted. The case nearest to the one before us is Vallambrosa Rubber Co. Ltd v. Farmer [1910] 5 Tax Cas. 529. Konstam summarises the decision as follows: The necessary expenses of cultivating and managing a rubber estate incurred in the year in which profits are earned are deductible, and it is no answer to the claim for deduction that a part of those expenses produced no return in that year because the whole of the rubber trees were not in full bearing; that fact does not make the expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In assessing the profits of tea concerns there will be allowed, as a charge against profits, the whole of the cost of the upkeep (e.g., weeding and draining) of extensions of the estate which are not in bearing; but no capital expenditure in connection with such extensions. Once the cultivation has begun with the completion of the planting, the annual cost of the upkeep of such extensions should be allowed as a business expense even though the estate is not in bearing. The question as to what is capital or revenue expenditure in respect of tea gardens is one the answer to which depends on certain general principles. The English decision in the case of Vallambrosa Rubber Co. v. Farmer [1910] 5 Tax Cas. 529. establishes certain p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the agricultural income obtained in the accounting year concerned and not the agricultural income of any other period. 5. In Malankara Rubber Produce v. Commissioner of Agricultural Income-tax [1955] K.L.T. 360 a Division Bench of the Travancore-Cochin High Court had to deal with a claim for deduction under section 7(2)(c) of Act 1 of 1119 (Travancore) and section 14(3)(c) of Act XXII of 1121 (Travancore), namely: 'the expenses of cultivating the crop from which such agricultural income is derived, of transporting such crop to market, including the maintenance of agricultural implements and cattle required for the purpose of such cultivation and for transporting the crop to market.' The court observed that it found ..... X X X X Extracts X X X X X X X X Extracts X X X X
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