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TMI Blog1989 (11) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ature plants from which income was actually derived. There were immature coffee plants and on some lands, new planting work was done which yielded no agricultural income during the years. The assessee claimed deduction of the interest on the loan borrowed in connection with the maintenance of the said estate. The question that arose for consideration before the Tribunal was whether deduction is to be given under section 5(k) or under section 5(e) of the Tamil Nadu Agricultural Income-tax Act, 1955. It was contended by the assessee, revision-petitioner herein, that section 5(k) of the Act applies only to the amount borrowed and actually spent on the land from which agricultural income is derived, and any interest other than this would be gov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordance with section 5(k) of the Act and the remaining portion has to be dealt with under section 5(e) of the Act. Learned counsel also submitted that the Tribunal has not properly interpreted the distinction between sections 5(k) and 5(e) of the Act and erred in holding that the interest on monies borrowed for cultivation expenses have to be brought under section 5(k) of the Act no matter whether there was any mature or immature plant. It was also submitted that the Tribunal is not correct in saying that, in determining the expenditure incurred on the land from which the agricultural income is derived, it is not possible to make this dubious distinction between land which yielded some produce and the rest. .Though the assessee is not di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortion of those items from the scope of section 5(e). The court observed that 'section 5(k) being a special provision, if section 5(k) applies to certain interest charges, the application of section 5(e) would be excluded even if all the statutory requirements of section 5 (e) are satisfied'." In Kil Kotagiri Tea and Coffee Estates Co. Ltd. v. Government of Madras [1974] 96 ITR 165, another Division Bench of this court held that section 5(e) is in the nature of a residuary clause and would take in not only the expenditure incurred for the purpose of earning the agricultural income but also very many expenses involved in carrying on the agricultural activity as an occupation, that the expression "for the purpose of the land" is much wider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rowed for spending on the land which yields income, there should be limit as, otherwise, it is possible for the assessees to claim a substantial portion of the income as an expenditure incurred for maintaining the crop which yields the income while such limitation is not necessary in respect of the interest payments on other borrowings for the maintenance of immature coffee plants. It is further clear that section 5(k) applies only to interest paid on the amounts borrowed and actually spent on the existing crop in the land from which income is derived and it will not apply to any interest payments on amounts borrowed for maintaining the other areas or plants from which agricultural income is not derived in the assessment year. In view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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