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TMI Blog1978 (3) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal is justified in confirming the disallowance of proportionate general charges of Rs. 4,058 in respect of Chittady Estate, Rs. 4,598 in respect of Vengathanam Estate and of Rs. 8,462 in respect of Vellandy Estate ? (2) Whether, on the facts and in the circumstances of the case, and in the light of the decision as reported in [1967] 66 ITR 710 (SC) (CIT v. Mahalakshmi Textile Mills Ltd.) the Tribunal is justified in disallowing the boundary wall repairs of Rs. 1,275 and cart road maintenance of Rs. 4,418 ? " The assessee, the Tropical Plantations Ltd., Kottayam, filed a return for the year 1968-69 disclosing a net income of Rs. 3,77,270. On scrutiny of the return, the assessing officer was of the view that some of the expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingencies, cart road repairs, provident fund, advance expenses, maternity benefits, sickness benefits, etc., which are common to mature and immature area. The apportionment is on acreage basis. We find that the same is only in order. It is therefore confirmed." The common expenses in respect of the Chittady Estate and Vengathanam Estate and Vellandy Estate were claimed to relate to the immature area of the rubber plantation in the estate. The assessee's complaint was that the apportionment between the immature and the mature area of the estate violated the principle laid down in Commr. of Agrl. IT v. Johnsons Estates Agencies (P.) Ltd. [1964] 52 ITR 629 (Ker). In that case, a Division Bench of this court surveyed the legislative history ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal is not part of the paper book to differ from its conclusion even if we have the power and the inclination to do so on this question of fact. What the department has done is to divide the total of the estate or overhead expenses by the number of acres comprising the estate and then multiply the expenses per acre by the number of acres covered by the immature plants in the estate of the assessee. This is an arbitrary approach which cannot be justified." To complete the discussion, we may quote s. 5(j) of the Agricultural Income-tax Act, and Expl. 2 to the said section. These are as follows: "5. Computation of agricultural income.--The agricultural income of a person shall be computed after making the following deductions, namely : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may mention at the outset itself that the decision in CIT v. Mahalakshmi Textile Mills Ltd. [1967] 66 ITR 710 (SC), cited by the Tribunal in referring question No. 2, seems to have no application. The assessee claimed deduction of expenses spent for the upkeep of a cart road and a boundary wall. These were claimed as necessary expenses incurred for the purpose of deduction and preservation of the rubber estate. The deduction was sought to be justified with respect to the provisions of ss. 5(d) and 5(m)(ii) of the Agricultural Income-tax Act. Counsel for the assessee contended before us that he was relying also on clause (j) of s. 5. The principle of the decision of the Supreme Court in Lakshmiji Sugar Mills Co. P. Ltd. v. CIT [1971] 82 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticular year is heavy on account of the fact that it is undertaken to remedy the effect of several years of wear and tear or neglect and also in spite of the fact that such expenditure may not be necessary for several years to come after the repairs have been effected. It appears to us that the principle of these decisions had not been kept in mind by the Tribunal and the basic facts had not been either assessed or found to enable us to give an answer to question No. 2 ; we would direct the Tribunal to re-hear the appeal in accordance with law and in the light of the observations made herein and of the principle of the decisions referred to in the course of this judgment. In the result, question No. 1 is answered in the negative, i.e., i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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