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TMI Blog1997 (11) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... l income of the estate appears to be from rubber plantations. Other agricultural income derived by the estate, it is said, is from coconuts, arecanuts, cloves, etc. A car is stated to be maintained by the estate for the purpose of supervision of a medical centre going by the name "Bharat Medical Centre" for the purpose of giving treatment to the staff members of the estate and the said medical centre is located at Trivandrum, 70 K. mtrs. away from the situs of the estate. 3. In respect of the two asst. yrs. 1984-85 and 1985-86, the AO it is said, reopened the assessments after the disposal of the appeal before the AAC, Grade I, Nagercoil. The ground for reopening of the assessment as relatable to the asst. yr. 1984-85 is that the yield of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to (1) expenses incurred in maintenance of the car, (2) rates and taxes, and (3) expenses incurred relating to the maintenance of Bharath Medical Centre and depreciation to the equipments in the said centre, etc. The deductions so claimed as per accounts by the assessee were not allowed either in full measure or totally disallowed. That apart, the AO estimated the yield from coconuts and arecanuts without accepting the claim made in that regard by the assessee. Further, the expenditure incurred by the assessee in the upkeep of coconut trees and clove plants was not fully allowed, in the sense of some portion of the claim being disallowed. The assessee, it appears, also derived agricultural income from leasehold lands. The income so deriv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , a Division Bench of this Court in Velimalai Rubber Co. Ltd. vs. Agrl. ITO (1991) 92 CTR (Mad) 242 : (1991) 188 ITR 262 (Mad) : TC 31R. 463 has held that the subsidy received from the Rubber Board under the Replanting Subsidy Scheme could not be considered as revenue receipt and consequently, could not be subjected to tax. This sort of a view has also been followed by this Court in many a decision subsequently rendered. Consequently, the finding relatable to the treatment of the rubber subsidy as revenue receipt and therefore, exigible to tax, deserves to be set aside and the assessee has to be necessarily given the benefit of exemption from taxation, treating such receipt as capital receipt. 9. Regarding the expenses incurred in maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef is ordered to be granted to the assessee in respect of the entirety of the claim relatable to rubber subsidy treating the same as capital expenditure and, therefore, not exigible to tax, besides giving 50 per cent of relief to the assessee as relatable to expenses incurred in the maintenance of Bharat Medical Centre and depreciation claimed in regard to the equipments installed therein. 10. What is left out for consideration is as to whether the AO has the necessary and requisite power to reopen the assessments relatable to the asst. yrs. 1984-85 and 1985-86 under s. 35 of the Agrl. IT Act, 1955 (for short 'the Act'), when especially the appeal preferred by the assessee before the AAC of Agrl. IT Nagercoil, questioning the original ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income must have been assessed at too low a rate or has been underassessed. This sort of a parameter is so eloquent and speaks for itself and, therefore, no elucidation is necessary. (3) The reopening must have to be done within five years of the end of that financial year. 12. In the case on hand, no doubt true it is, the original assessment made by the AO had been challenged in appeal before the AAC of Argl. IT, Nagercoil, and the appeal so filed had been finally disposed of. The moot issue arising for consideration, in such a situation, is as to whether it is permissible for the AO to reopen the assessment. 13. If what has been determined by the AO had been the subject-matter of appeal and the appeal so filed, had been finally disp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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