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TMI Blog1960 (12) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the question raised was : " Whether under the Travancore-Cochin Agricultural Income-tax Act, 1950, in calculating the assessable agricultural income of a rubber estate already planted and containing both mature yielding rubber trees and also immature rubber plants which have not come into bearing, the annual expenses incurred for the upkeep and maintenance of such rubber plants are not a permissible deduction, and, if so, whether the sum of I. Rs. 42,660-4-1 expended by the assessee in the relevant accounting year 1952 under this head may be deducted ? " And in the other two the question referred was : " Whether the expenses incurred for the maintenance and upkeep of immature rubber trees constitute a permissible deduction with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 60(1) of the Act to the High Court and that was Reference No. 19 of 1955. In Agricultural Income-tax Reference No. 15 of 1955, which related to accounting year 1952 and the assessment year 1953-54, the area under cultivation was 3,453.65 out of which 2,967.91 acres had mature rubber yielding trees and 485.74 acres had immature rubber growing trees. In that year the amount expended on the maintenance and tending of the immature rubber trees was Rs. 42,660-4-1. In that case, however, the Agricultural Income-tax Tribunal rejected the appellant's claim and disallowed the expenditure. At the instance of the appellant a case was stated to the High Court under section 60(1) of the Act and was answered in the negative and against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income has given rise to the interpretation that the deduction is to be from the income of the year in which the trees on which the amount claimed was expended bore any income. In a somewhat similar case, Vallambrosa Rubber Co. Ltd. v. Farmer, the expenditure of the kind now claimed was allowed under the corresponding provision of the English Income Tax Act. In that case a rubber company had an estate in which in the year of assessment only 1/7 produced rubber and the other 6/7 was in the process of cultivation for the production of rubber. It may be added that rubber trees do not yield any rubber until they are about six years old. The expenditure for the superintendence, weeding, etc., incurred by the company in respect of the whole esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a lease from Government for twenty years and in addition to paying the rent and royalties for the lease the assessee had to pay two further sums as "protection fees" under the terms of the lease. Those sums were held to be capital expenditure inasmuch as they were incurred for the acquisition of an asset or an advantage of enduring nature and were no part of the working or operational expenses for carrying on the business of the assessee. In our opinion the amount expended on the superintendence, weeding, etc., of the whole estate should have been allowed against the profits earned and it is no answer to the claim for a deduction that part of those expenses produced no return in that year because all the trees were not yielding rubber ..... X X X X Extracts X X X X X X X X Extracts X X X X
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