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TMI Blog1990 (10) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1979-80, the assessee sold 6,514 rubber trees for a consideration of Rs. 4,99,500. The Income-tax Officer estimated the cost of rubber trees as on January 1, 1964, at Rs. 20 per tree and computed the capital gains that accrued on the sale of the above rubber trees. In appeal, the Commissioner of Income-tax (Appeals) enhanced the cost of a rubber tree as on January 1, 1964 to Rs. 50 and computed the capital gains at Rs. 1,95,420 as against Rs. 3,69,220 arrived at by the assessing authority. In the accounting year relevant to the assessment year 1980-81, the assessee sold 5,250 rubber trees for a consideration of Rs. 3,76,900. Estimating the cost of a rubber tree as on January 1, 1964 at Rs. 20, the Income-tax Officer computed capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . T. A. Nos. 593 and 594/(Coch) of 1977-78, dated August 27, 1979, in the case of Ruby Rubber Works, Changanacherry, held that rubber replantation subsidy received by the assessee is not income assessable to tax. For the assessment year 1980-81, the Commissioner of Income-tax (Appeals) disallowed the claim of bonus amounting to Rs. 55,071. A sum of Rs. 55,071 was bonus for the calendar year 1975 but the matter was settled only during the year under consideration and the Income-tax Officer disallowed the claim. He took the view that the liability did not arise during the relevant accounting period. In appeal, the Appellate Tribunal held that the bonus paid is contractual bonus and that the assessee's claim for deduction of amounts "on paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of replanting, did not constitute agricultural income within the meaning of section 2(1) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that cost of acquisition can be envisaged with regard to the rubber trees sold by the assessee from its rubber estate ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that in respect of sale of rubber trees from the estate, it is capable for computing capital gain and the computation provisions for computing capital gain are applicable ? " It is agreed that, in the light of our answer to the questions referred at the instance of the Revenue, it is not necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt accounting period is a pure finding of fact. Based on the said finding, the conclusion of the Appellate Tribunal that no capital gains arose is valid and justified in law. No question regarding the manner and method of valuation for valuing the rubber trees sold for the purpose of capital gains arose for consideration before the Appellate Tribunal. The fundamental question was whether any capital gains arose at all. The answer was obvious. The old and unyielding rubber trees when sold would procure only a far lesser price than when it was young and yielding as on January 1, 1954, or January 1, 1964 judicial notice can be taken of the said notorious facts. Therefore, we hold that the manner and method of valuation as such did not arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is not a revenue receipt under the Income-tax Act, 1961, for the assessment year 1979-80. We answer question No. 3 in the affirmative, against the Revenue and in favour of the assessee. Admittedly, the assessee is maintaining accounts on mercantile basis. A sum of Rs. 55,071 was claimed as deduction on account of payment of bonus. The claim in this behalf has been dealt with by the Appellate Tribunal in paragraphs 9 and 10 of its order dated October 27, 1984. The claim was made during the assessment year 1980-81 for which the accounting period ended on December 31, 1979, and the bonus amount related to the calendar year 1975. The plea of the assessee was that, with regard to plantations, the Association of Planters of Kerala determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1980-81 for which the accounting period ended on December 31, 1979. Since the accounts are kept on mercantile basis, normally, the assessee is entitled to deduction for payment on accrual basis only. Relief can be granted only on that basis. (See CIT v. K. A. Karim and Sons [1982] 133 ITR 515 (Ker) [FB] and Malayalam Plantations (India) Ltd. v. CIT [1990] 184 ITR 505, 514 (Ker)). Even though the assessee maintains accounts on mercantile basis, it is entitled to adopt a different method for one portion of its business or one class of accountable item. But, it should be established that this deviation for the particular class or portion of accountable item is regularly or consistently employed and it results in the proper determination of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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