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TMI Blog2021 (11) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... The agricultural income tax paid for the apportioned agricultural income cannot overlap into the business income as tax payable by the assessee for earning business income. No reported judgment on this aspect of the matter is brought to our notice. Therefore from a plain and literal meaning of applicable clause, we are of the view that the argument that the tax paid under Act 1991, ensures for deduction is unsustainable and accordingly rejected. Revenue has accepted the return of the assessee for the preceding assessment years and the departure now in the subject assessment years is illegal - The judgment relied on by the revenue [ 2012 (1) TMI 410 - KERALA HIGH COURT ] provides a complete answer in this behalf and by following the ratio of the Apex Court in Gangadharan's case [ 2008 (7) TMI 10 - SUPREME COURT ], the said objection of the assessee is also rejected. For the above reasons and discussion, we are of the view that the gist of the questions framed by the assessee is canvassed in the manner referred to above and we have, after taking note of the liability under respective enactments are satisfied that the Tribunal has recorded a valid, legal and correct finding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.112/Coch/2014 ITA No.22 of 2018 3. The appeals raise a question of entitlement by way of deduction of Income Tax paid under the Kerala Agricultural Income Tax Act, 1991 (for short 'Act 1991') and under Section 43B of the Central Act. 4. The assessee is a company with the share holding held by the Governments of India and Kerala. The appellant undertakes Oil Palm cultivation and manufacture and production of crude palm oil. The assessee, till the assessment year 2005-2006, has been paying returns under Act 1991 on the 100% income derived from the agriculture and business income from manufacture/production of crude palm oil. A controversy arose between the assessee and the revenue, with the revenue implementing Rule 7 of the Central Income Tax Rules, 1962 providing for assessment of income which is partly agricultural and partly business income. The present judgment need not advert to the details in this behalf, but would be sufficient to observe that this Court in ITA No.382/2010 and Writ Petition (c) No.36862 of 2004 has drawn the cut off line for the assessee to file returns both under Act and Act 1991 dealing with respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the argument of Mr.Anil D.Nair. We have heard the rival submissions and perused the material on record. Admittedly, the agricultural income is exempt from Central Income Tax by virtue of provisions of Section 10(1) of the Income Tax Act. When agricultural income itself is exempt from the purview of Central Income Tax, there is no reason why a payment made out of agricultural income (already exempt) should be allowed as a deduction in computing the business income under the Central Income-Tax Act. Section 43B states that a deduction otherwise allowable under this Act shall alone be allowed as a deduction u/s 43B(a). Since the agricultural income tax is no tax otherwise allowable under the Income Tax Act, payment of agricultural income tax in the respective assessment years on payment basis cannot be allowed as a deduction u/s 43B(a). 4.1 The order of the ITAT in ITA Nos.649, 650 651/Coch/2005 dated 30.11.2007 in assessee's own case does not decide the issue in favour of the assessee. On the contrary, the Tribunal has only remitted back the issue to the files of the Assessing Officer to recompute the income. The relevant finding of the Tribunal in assessee' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax under Rule-7 and the Department has accepted the claim of assessee in all entirety for the preceding assessment years. Therefore, for the subject assessment years as well, the same view ought to be maintained for consistency of assessee's tax liability under Central Act and Act 1991. In other words, the revenue is precluded or estopped from taking a different view on the issues which are accepted by the revenue. He next contends that the income tax paid by the assessee under Act 1991 ought to be deducted under Section 43B of Central Act as the tax paid by the assessee comes within the eligibility criteria set out in Section 43B of the Act. The Tribunal fell in error by reading the words otherwise allowable in isolation of sub section (1) of Section 43B and therefore the disallowance of deduction of agricultural income tax paid under Act 1991 is illegal. 8. Senior Adv. Mr.PKR Menon argues to sustain the findings recorded by the Tribunal and the authorities under the Central Act viz. that the deduction claimed is an import arising as an obligation under Act 1991 to the assessee. Act 1991 deals with agricultural income payable by an assessee to whom the provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doing so or it is in public interest to do so or for a pronouncement by the higher court when divergent views are expressed by the Tribunals or the High Courts. The matter shall be placed before the concerned Bench for disposal of the appeals. 10. We have taken note of the submissions and perused the record. We have called upon the counsel for assessee to place before us the separate returns filed by the assessee for the subject assessment years under Central Act and Act 1991 to appreciate the movement or flow of Agricultural Income under Act 1991 and the basis for claiming deduction under Section 43B of Central Act. 11. Let us first examine the obligation of assessee to file separate returns under Central Act and Act 1991. The judgment of this Court in ITA No.382/2010 and Writ Petition (c) No.36862 of 2004 has laid down the applicable law in this behalf. The assessee, by applying the apportionment principle, is under obligation to file returns under both the enactments. Agricultural income is excluded from the scope of Section 10(1) of Central Act. Therefore agricultural income does not form part of computation under Section 14 of the Act, 1991. Further, the deduction is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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