Gauhati H.C : This is an appeal against the common judgment of the learned single Judge dt. 7th Nov., 1994 in Civil Rule Nos. 2094/92 and 2580/94 filed by the petitioners in Civil Rule No. 2094/92.

High Court Of Gauhati

Assam Co. Ltd. & Anr. vs. State Of Assam & Ors.

Sections 34, 80HHC, Rule 8

Asst. Year 1986-87, 1987-88

V.K. Khanna, C.J. & A.K. Patnaik, J.

Writ Appeal No. 39 of 1995

21st September, 1995

Decision in favour of Revenue

Counsel Appeared

Dr. V. Gauri Shankar with A. Srivastava & A. Dutta, for the Appellants : S.N. Bhuyan with A.R. Banerjee, D.P. Chaliha & P.P. Todi, for the Respondents

A.K. PATNAIK, J.:

This is an appeal against the common judgment of the learned single Judge dt. 7th Nov., 1994 in Civil Rule Nos. 2094/92 and 2580/94 filed by the petitioners in Civil Rule No. 2094/92.

The relevant facts are that the appellant No. 1 is a public limited company incorporated under the Companies Act, 1956, carrying on the cultivation, manufacture and sale of tea inside and outside India and the appellant No. 2 is one of the directors of appellant No. 1. For cultivation of tea, the appellant is liable to pay tax under the Assam Agrl. IT Act (for short `the Agrl. IT Act’) and for manufacture and sale of tea, it is liable for income-tax under the IT Act, 1961 (for short the IT Act).

For the asst. yr. 1985-86 pertaining to accounting period ending 30th June, 1984, the appellant No. 1 was assessed under the IT Act by the IAC, Assessment Range II, Guwahati by order dt. 29th Feb., 1988. In the said assessment order, the IAC first allowed deduction of Rs. 44,98,378 under s. 80HHC of the IT Act and thereafter applied r. 8 of the IT Rules, 1962 (for short the IT Rules) and took 40% of the income from tea as business income. On the basis of the said computation, the appellant No. 1 filed a computation before the Agrl. ITO, Assam, treating the balance 60% as income from agriculture and assessment was completed by him on the basis of such computation.

For the asst. yr. 1986-87 pertaining to accounting period ending 30th June, 1985, the Dy. CIT (Assessment), Special Range-II, Gauhati, assessed the appellant No. 1 under the IT Act and in the assessment order dt. 23rd Aug., 1994 as rectified under s. 154, the Dy. CIT first applied r. 8 of the IT Rules and determined 40% of the income from tea as income from business and thereafter allowed deduction of Rs. 99,11,473 under s. 80HHC of the IT Act from such business income. Aggrieved, the appellant No. 1 preferred an appeal before the CIT(A), Dibrugarh who following the decision of the Madras High Court in the case of CIT vs. Periakaramalai Tea & Produce Co. Ltd. (1972) 84 ITR 643 (Mad) held that the amount deductible under s. 80HHC of the IT Act should have been determined with reference to the composite income from the tea business before applying r. 8 of the IT Rules and directed the Assessing Officer (AO) to take necessary action in the matter. On receipt of the aforesaid appellant order, the appellate No. 1 filed a revised computation showing 60% of such income from tea as agricultural income before the Agrl. ITO, AsFor the asst. yr. 1987-88 pertaining to accounting period ending 30th June, 1986, the Dy. CIT (A), Special Range- II, Guwahati, assessed the appellant No. 1 under the IT Act on 30th March, 1990 and in the assessment order dt. 30th March, 1990 first applied r. 8 of the IT Rules and determined the income from business as 40% of the income from tea and thereafter allowed deduction of Rs. 90,00,000 under s. 80HHC of the IT Act. Aggrieved, the appellant No. 1 filed an appeal before the CIT(A), Dibrugarh who following his earlier appellate order dt. 28th Nov., 1990 for the asst. yr. 1986-87 held that the amount deductible under s. 80HHC of the IT Act should have been determined with regard to composite income from tea business before application of r. 8 of the IT Rules and directed the AO to take necessary action in the matter by his order dt. 21st Dec., 1991. On receipt of the said order of the CIT(A), the appellant No. 1 filed a revised computation of income before the Agrl. ITO showing 60% of the income from tea as agricultural income.

The Agrl. ITO, Assam, however, issued notices dt. 3rd Aug., 1992 to the appellant No. 1 for reassessment for the asst. yr. 1985-86 and for assessment for the asst. yrs. 1986-87 and 1987-88 stating therein that it appears from the records that Rs. 44,98,373, Rs. 1,05,00,000 and Rs. 90,00,000 for the asst. yrs. 1985-86, 1986-87 and 1987-88 respectively have been allowed by the Indian IT authority under s. 80HHC of the IT Act before application of r. 8 of the IT Rules, which was detrimental to the State Revenue and that he had obtained permission from the Appropriate Authority to examine the records of the appellant No. 1 under the proviso to s. 49 of the Agrl. IT Act for computing the agricultural income of the appellant No. 1 for the said assessment years after refusing to accept the computation made by the Central IT authority. Since the power to refuse to accept the computation made by the Central ITO is vested in the Agrl. ITO, Assam, in the proviso to r. 5 of the Assam Agrl. IT Rules, 1939, the appellants moved this Court under Art. 226 of the Constitution in Civil Rule No. 2094/92 for a declaration that the proviso to r. 5 of the Agrl. IT Rules to the extent it empowered the Agrl. ITO to refuse to accept the computation made by the Central IT authority was ultra vires the Constitution and for a mandamus commanding the respondents to withdraw the proceedings in pursuance of notice dt. 3rd Aug., 1992. After hearing the parties, however, the learned single Judge dismissed the Civil Rule by the judgment dt. 7th Nov., 1994 (for short the “impugned judgment”).

Dr. Gauri Shankar, learned counsel or the appellants, submitted that a reading of the impugned judgment would show that the learned single Judge has taken an erroneous view that the validity and legality of the proviso to r. 5 of the Agrl. IT Rules had already been upheld by the Full Bench in the case of Maud Tea & Seeds Co. vs. Agrl. ITO AIR 1970 Assam 65, but in the said case, the vires of the proviso to r. 5 of the Agrl. IT Rules was not challenged and the observations made by the Full Bench in the said case were at best in nature of obiter and cannot bind this Court. Mr. S.N. Bhuyan, learned Advocate General, Assam, did not seriously resist the aforesaid submission that the vires of the proviso to r. 5 of the Agrl. IT Rules was not under challenge in the aforesaid case. On a perusal of the judgment of the Full Bench in the case of Maud Tea & Seeds Co. (supra) we find that in that case the vires and the validity of the Expln. to s. 2(a) and second proviso to s. 8 (2) of the Agrl. IT Act which deal with the definition of agricultural income derived from land by cultivation of tea and computation of such income respectively were under challenge and while upholding the validity of the said provisions of the Agrl. IT Act, the Full Bench observed in paragraph 28 that r. 5 of the Agrl. IT Rules was in conformity with the Indian IT Act and the Rules framed thereunder and cannot be struck down as unconstitutional but no ratio was laid down therein that the proviso to said r. 5 to the extent it empowered the Agrl. ITO to refuse to accept the computation made by the Central IT authority was valid in law so as to preclude an independent examination of the said question by this Court in this case.

9. According to Dr. Gauri Shankar, the proviso to r. 5 to the extent it empowered the Agrl. ITO to refuse to accept the computation made by the Central IT authority is ultra vires the Constitution as well as the Agrl. IT Act. His argument is that Art. 366(1) of the Constitution defines “agricultural income” to mean agricultural income as defined for the purposes of the enactments relating to Indian income-tax and accordingly “agricultural income” in entry 46 in List II of the Seventh Schedule of the Constitution in respect of which the State Legislature has powers under Art. 246(3) of the Constitution to enact laws imposing taxes would mean “agricultural income” as defined for the purposes of the enactments relating to Indian income-tax. Dr. Gauri Shankar submitted that it has now been decided by a series of decisions of the apex Court that enactments relating to Indian income-tax would not only mean the IT Act but also the IT Rules. Sec. 2(1)(a) of the IT Act defines “agricultural income” and r. 8 of the IT Rules deals with income from tea which is partly business and partly agricultural income. Rule 8 specifically

stipulated that income derived from sale of tea grown and manufactured by a settler in India shall be computed as if it was income derived from business and 40% of such income shall be deemed to be income liable to tax. Dr. Gauri Shankar vehemently argued that only after computation of income derived from sale and manufacture of tea in India is made by the Central IT authority, 40% is treated as income from business and the balance 60% of such income has to be accepted as income from agriculture by the Agrl. ITO for the purpose of levy of agricultural income-tax but if the Agrl. ITO is permitted to refuse to accept the computation made by the Central IT authority, the constitutional provisions in Arts. 246(3) and 366 (1) would be contravened. Dr. Gauri Shankar pointed out that the definition of “agricultural income” in s. 2(a) of the Agrl. IT Act enacted by the State Legislature of Assam is the same as in the IT Act. He brought to our notice the Expln. to s. 2(a) and the last proviso to s. 8(2) of the Agrl. IT Act and argued that the language in the Expln. to s. 2(a) and the last proviso to s. 8(2) of the Agrl. IT Act made it abundantly clear that agricultural income derived from land by cultivating tea would mean portion of the income derived from cultivation, manufacture and sale of tea as computed by the Central IT authority under the IT Act and the IT Rules. Hence, the provisions of the Agrl. IT Act enacted by the State Legislature, Assam, are also consistent with the Constitution as well as the IT Act and the IT Rules with regard to the meaning of agricultural income and the computation thereof where it is derived from sale of tea grown and manufactured by a seller in the State of Assam. He further argued that even r. 5 of the Agrl. IT Rules framed thereunder under the Agrl. IT Act which has provided that the portion of the net income worked out under IT Act and left unassessed as being agricultural shall be assessed as agricultural income, but in the last limb of the proviso to said r. 5, a power has been reserved with the Agrl. ITO to refuse to accept the computation of the Central IT authority. For appreciating the aforesaid contention of Dr. Gauri Shankar, the relevant portion of r. 5 of the Agrl. IT Rules is extracted hereinbelow : Rule 5. In respect of agricultural income from tea grown and manufactured by the seller in the Province of Assam the portion of net income worked under the Indian IT Act and left unassessed as being agricultural, shall be assessed under this Act after allowing such deductions under the Act and the rules made thereunder, so far as they have not been allowed under the Indian IT Act in computing the net income from the entire operation : Provided that the computation made by the ITO shall be ordinarily accepted by the Assam Agrl. ITO who may, for his satisfaction under s. 20 of the Assam Agrl. IT Act, obtain further details from the assessee or from the Indian ITO, but shall not without the previous sanction of the Dy. Commr. of Taxes or when there is no Dy. Commr. of Taxes, the Asstt. Commr. of Taxes empowered by the Commr. of taxes in this behalf require under the proviso to s. 49 the production of account books already examined by the Indian ITO for determining the agricultural income from tea grown and manufactured in Assam or refuse to accept the computation of the Indian ITO:

According to Dr. Gauri Shankar, the last limb of the aforesaid proviso to r. 5 empowering the Agrl. ITO to refuse to accept the computation made by the Central IT authority is contrary to Art. 246 r/w Art. 366(1) of the Constitution as well as the Expln. to s. 2(a) and the last proviso to s. 8(2) of the Agrl. IT Act. Hence, the Court should either strike down the said last limb of the proviso to r. 5 as ultra vires or read down the same as non- existent according to well settled principles of statutory interpretation. In support of his aforesaid submissions Dr. Gauri Shankar relied on the decisions of the Supreme Court in the case of Karimtharuvi Tea Estates Ltd. & Anr. vs. State of Kerala & Ors. (1963) 48 ITR 83 (SC) : TC 31R.89, Anglo American Direct Tea Trading. Co. Ltd. & Ors. vs. Commr. of Agrl. IT (1968) 69 ITR 667 (SC) : TC 31R.95 and Tata Tea Ltd. & Ors. vs. State of West Bengal & Ors. (1968) 70 CTR (SC) 99 : (1988) 173 ITR 18 (SC) : TC 31R.105.

In reply to the aforesaid submissions of Dr. Gauri shankar, Mr. S.N. Bhuyan, learned Advocate General, Assam, submitted that the proviso to r. 5 of the Agrl. IT Rules has to be read as a whole and in the first limb of the proviso it has been provided that the computation made by the ITO shall be “ordinarily” accepted by the Assam Agrl. ITO. Hence, even without the last limb of the proviso to r. 5 empowering the Agrl. ITO to refuse to accept the computation made by the Central ITO, the Agrl. ITO was still empowered under the first limb of the proviso not to accept the computation made by the Central IT authority in extra ordinary cases. No effective relief, therefore, can be granted to the appellants by striking down the last limb of the proviso to r. 5 empowering the Agrl. ITO to refuse to accept the computation made by the Central IT authority. He also contended that the decision of the apex Court in the case of Anglo American Direct Tea Trading Co. Ltd. (supra) and Tata Tea Ltd. (supra) would show that the Supreme Court has taken a view that under the Kerala Agrl. IT Act, 1950 and the rules made thereunder, the Agrl. ITO was bound to accept the computation made by the Central IT authority but the proviso to s. 49 of the Assam Agrl. IT Act and the proviso to r. 5 of the Assam Agrl. IT Rules would show that although ordinarily

the Agrl. ITO is required to accept the computation made by the Central IT authority for the purpose of computing the agricultural income from tea grown and manufactured by a seller in the State of Assam, such computation as made by the Central IT authority was not binding on the Agrl. ITO.

Before dealing with the aforesaid rival contentions of the learned counsel for the parties, it is necessary to discuss the decisions of the apex Court on which reliance has been placed by Dr. Gauri Shankar, learned counsel for the appellants. In the case of Karimtharuvi Tea Estates Ltd. (supra), the grievance of the petitioner in that case was that in computing the taxable income in the relevant accounting years for the purpose of assessment of tax under the Kerala Agrl. IT Act, the assessing authority did not allow deduction of expenses incurred by it in upkeepment and maintenance of immature tea plants from which no agricultural income had been derived during the relevant accounting years, though such expenses were deducted by the IT Department in connection with the assessment of the income-tax with respect to the non-agricultural portion of the income from the petitioner’s tea estate in those years. Against the assessment orders, the petitioner in that case filed appeals before the Dy. Commr. of Agrl. IT, Quilon. While the appeals were pending, an amendment was made in the year 1961 to the Kerala Agrl. IT Act, adding Expln. 2 to s. 5 of the said Act, which stated that a person deriving agricultural income was not entitled to deduction of any expenditure laid down or expended for the cultivation, unkeeping or maintenance of immature plants from which no agricultural income has been derived during the previous year. The said Expln. 2 to s. 5 was challenged on the ground that the State legislature of Kerala could not enact such a provision which would make agricultural income under the Kerala Agrl. IT Act different from “agricultural income” as defined in the enactments relating to IT Act and that the impugned Expln. 2 to s. 5, if applicable to income from tea plantation would make the income from such plantation for the purpose of Agrl. IT Act higher than what would be if computed in accordance with the definition in the IT Act enactment. The Supreme Court did not strike down the impugned Expln. 2 to s. 5 of the Kerala IT Act, but held that the said Explanation would not extend to computation of agricultural income derived from plantations and that in computation of such agricultural income for the purpose of tax under the Kerala Agrl. IT Act the income must be taken to be as defined for the purpose of enactments relating to Indian IT Act as provided in the Expln. to s. 2 of the said Act. In this decision, therefore, the question as to whether the computation of income derived from tea plantation made by the Central IT authority under the IT Act was binding on the Agrl. ITO for the purpose of assessment of agricultural income under the Kerala Agrl. IT Act did not arise for decision. With regard to the power of the State legislature to make law relating to taxes on agricultural income, the Supreme Court observed : “It is true, as urged for respondents, that the State legislature has full freedom to enact such provisions as it considers fit in respect of tax on agricultural income and that such power includes the power to enact for matters subsidiary and incidental to the taxation of agricultural income. We also agree that the State legislature is free to provide the method of computation of the taxable agricultural income and is free to allow any particular deductions from the gross income as it considers fit. It is not disputed for the respondent that the power of the State legislature to enact a law in respect of agricultural income relates only to such agricultural income as is defined in Art. 366 of the Constitution.”

12. In the case of Anglo American Direct Tea Trading Co. Ltd. (supra) cited by Dr. Gauri Shankar the grievance of the appellants in that case was that the Agrl. IT Asstt. Commr. disregarded the computation made by the Central IT assessment authority and on independent computation of tea income determined the agricultural income of the appellants which was much higher than 60% of the total tea income assessed by the Central IT authority. On appeal, the Dy. Commr. of Agrl. IT and ST, South Zone, Quilon, held that the Agrl. ITO could make independent computation of tea income and was not bound to adopt the assessment made by the Central ITO. On further, appeal, the Kerala Agrl. ITAT, Trivandrum, held that the Agrl. ITO was bound to accept the computation of tea income made by the Central IT authority. On a reference being made under s. 60(1) of the Kerala Agrl. IT Act, 1950, the High Court, following its earlier decision in Commr. of Agrl. IT vs. Perunad Plantation Ltd. (1965)

56 ITR 193 (Ker), held that the Agrl. ITO was not obliged to accept the computation of tea income made by the ITO acting under the IT Act, and it was open to him to compute income independently applying the relevant provisions of the IT Act and the Agrl. IT Act. On the matter being carried by special leave to appeal, the Supreme Court after discussing its earlier decision in the case of Karimtharuvi Tea Estates Ltd. (supra) and overruling the decision of the Madras (sic Kerala) High Court in the case of Perunad Plantation Ltd. (supra) held : “There is no provision in the Kerala Act authorising the Agrl. ITO to disregard the computation of the tea income made by the IT authorities acting under the Central IT Acts. The Agrl. ITO in making an assessment of agricultural income is

bound to accept the computation of the tea income already made by the Central IT authorities and to assess only

60% of the income so computed less allowable deductions as agricultural income taxable under the Kerala Act.” Thus in the aforesaid case, on an interpretation of Kerala Agrl. IT Act and the rules made thereunder, the Supreme Court took a view of that the Agrl. ITO under the Kerala Act was bound to accept the computation income from tea already made by the Central IT authority and to assess only the balance 60% of the income to Agrl. IT. But in the aforesaid case, the Supreme Court also noticed that under some Acts and Rules of some other States, the Agrl. ITO was authorised in special cases to disregard the assessment made by the Central IT authority and make fresh computation of tea income and cautioned that it should not be understood to have said that the assessment made by the Central ITO was in any way binding on the Agrl. ITO. The relevant observations of the Supreme Court in the said case are quoted hereinbelow : “Under some Acts and Rules, the Agrl. ITO is bound to adopt the assessment of the tea income made by the Central IT authorities. But under some other Acts and Rules, he is authorised in special cases to disregard this assessment and to make a fresh computation of the tea income. We express no opinion on the construction of these Acts and Rules. For the purpose of these appeals, it is sufficient to say that the Kerala Agrl. IT Act and Rules do not confer upon the Agrl. ITO the power to disregard the assessment of the tea income already made by the Central IT authorities.” “For the purpose of these appeals, it is sufficient to say that the Agrl. ITO acting under the Kerala Agrl. IT Act, 1950, is bound to follow the assessment of income by the Central ITO under r. 24 of the IT Rules, 1922, and r. 8 of the IT Rules, 1962, where such assessment has been made before the Agrl. ITO proceeds to make the assessment under the Kerala Act. The question referred to the High Court is answered accordingly. We must not be understood to say that the assessment made by the Central ITO under r. 23 of the IT Rules, 1922, or r. 7 of the IT Rules, 1962, is in any way binding on the Agrl. ITO.”

13. In the case of Tata Tea Ltd. (supra), the Kerala Agrl. IT (Amendment) Act, 1980 and the Bengal Agrl. IT (Amendment) Act, 1980 were under challenge before the Supreme Court under Art. 32 of the Constitution. The Expln. to s. 2(a)(2) of the Kerala Agrl. IT Act, 1950 stated that the agricultural income derived from the land used for agricultural purpose by cultivation of tea leaves meant that portion of the income derived from the cultivation, manufacture and sale of tea as defined to be agricultural income for the purpose of enactments relating to Indian income-tax and the said Explanation was sought to be deleted by the Kerala Agrl. IT (Amendment) Act, 1980. Similarly, in sub-s. (2) of s. 8 of the Bengal Agrl. IT Act, 1944, it was provided that notwithstanding anything contained in that Act in the case of tea grown in West Bengal and sold by the grower himself or his agent after manufacturing, the agricultural income derived therefrom shall be deemed to be that portion of the income computed under the Indian IT Act, 1922 on which income-tax was not payable under the said Act of 1922. In

1979, sub-s. (2A) was inserted in s. 8 of the said Bengal Agrl. IT Act, 1944, providing for assessment in cases where assessments under the IT Act had not been completed or had been annulled or set aside. But by the Bengal Agrl. IT (Amendment) Act, 1980, the said sub-ss. (2) and (2A) of s. 8 were sought to be deleted. The contention of the petitioners before the Supreme Court was that by the said two impugned amendments, the State legislatures of Kerala and West Bengal sought to assume the power, competence and jurisdiction to impose agricultural income-tax on the entire income derived from the sale of tea grown and manufactured by seller and thereby transgressed the constitutional limitation contained in Art. 246(3) r/w entry 46 of the List II of the Seventh Schedule of the Constitution and the apex Court after discussing the law laid down in the earlier two cases of Karimtharuvi Tea Estate Ltd. and Anglo American Direct Tea Trading Co. Ltd. (supra) held that notwithstanding the deletion of the Expln. to s. 2(a)(2) of the Kerala Agrl. IT Act, 1950 and the deletion of sub- ss. (2) and (2A) of the s. 8 of the Bengal Agrl. IT Act, 1944 by the two impugned amendments of 1980, the result would still be that State legislatures of Kerala and West Bengal can impose tax in respect of only 60% of the income derived by assessee selling tea grown and manufactured by him in India and that such income has to be computed in the manner laid down in the IT Act for computation of agricultural income and that it was, therefore, not necessary to strike down the impugned amendments as ultra vires the Constitution. In the language of Kania, J., as he then was, who delivered the judgment on behalf of the Court : “In view of what we have discussed above, it appears to us that although the Expln. to s. 2(a)(2) of the Kerala Agrl. IT Act, 1950, has been deleted by the Amendment Act of

1980, the result would still be the same, namely, that the Kerala State legislature can impose tax only in respect of

60% of the income derived by an assessee who sell tea grown and manufactured by him in India and such income has to be computed in the manner laid down in the Act of 1922 and thereafter in the Act of 1961 for computation of business income. The same is the position in respect of the powers of the legislature of the State of West Bengal in spite of the amendments made by the said legislature by the Amendment Act of 1980 and earlier under the amending Act of 1979 which was in force only for one year as we have stated before. It is not necessary to

strike down the said amendments because they do not directly come into conflict with the definition of the term “agricultural income” under the Constitution as we have pointed out earlier, but we may make it clear that they do not confer any wider power on the State legislature to impose taxes on agricultural income than what we have set out earlier.”

The up-shot of the aforesaid discussion of the law as laid down by the apex Court in the three decisions relied on by Dr. Gauri Shankar is that under Art. 246(3) r/w entry 46 of List II of the Seventh Schedule of the Constitution, the State Legislatures have powers to make law imposing tax on agricultural income as defined in Art. 366(1) of the Constitution. Since Art. 366(1) of the Constitution states that agricultural income would mean agricultural income as defined for the purpose of enactments relating to Indian income-tax and enactments relating to Indian income-tax includes the IT Act and IT Rules and r. 8 of the IT Rules provides that income derived from the sale of tea grown and manufactured by the seller in India shall be computed as income derived from business and 40% of such income shall be deemed to be liable to tax under the IT Act, only the balance 60% of such income would be deemed to be agricultural income on which the State Legislature would have powers to levy agricultural income- tax under the said Art. 246(3) r/w Entry 46 of List II of Seventh Schedule of the Constitution. While the State Legislature would have plenary powers to make law in respect of taxes in relation to the aforesaid 60% of the income derived from manufacture and sale of tea deemed to be agricultural income, which would include all subsidiary and incidental matters such as method of computation of agricultural income and the deductions that would be permissible from such agricultural income. But the State Legislature would have no power to make any law which would have the effect of levying tax on the aforesaid 40% of such income on which tax is payable under the IT Act by virtue of the provisions of the IT Act. The apex Court also took the view that the computation of income from tea has to be in accordance with the relevant provisions of the enactment relating to the Indian IT Act and the deductions towards various expenses incurred for the purpose of earning the income as are allowable under the said enactments relating to Indian income-tax, if disallowed, would result in agricultural income-tax being imposed on more than the aforesaid 60% of income from tea deemed as agricultural income as per the Constitution.

The contention of Dr. Gauri Shankar is that while the Expln. to s. 2(a) and the last proviso to s. 8 of the Assam Agrl. IT Act are within the powers of State Legislature to levy tax on agricultural income, the proviso to r. 5 of the Agrl. IT Rules made thereunder to the extent it empowers the Agrl. ITO to refuse to accept the computation made by the ITO under the IT Act is inconsistent with the aforesaid Expln. to s. 2(a) and the last proviso to s. 8 of the Agrl. IT and is beyond the competence of the State Legislature. In support of the said contention, he placed reliance on the observations of the Supreme Court in the case of Anglo American Direct Tea Trading Co. Ltd. (supra) to the effect that the assessment made by the Central IT authority under the IT Act is binding on the Agrl. ITO. Mr. S.N. Bhuyan, learned Advocate General, on the other hand, brought to our notice the proviso to s. 49 of the Agrl. IT Act to show that in appropriate cases the Agrl. ITO may examine the assessment of the Central IT authority and reject the same and contended that the proviso to r. 5 of the Agrl. IT Rules was, therefore, consistent with the provisions of the Agrl. IT Act and was within the competence of the State Legislature. The Expln. to s.

2(a) the last proviso to s. 8 and the proviso to s. 49 of the Agrl. IT Act are quoted herein below : “2. Definitions.— In this Act, unless there is anything repugnant in the subject or context………………. Explanation.—”Agricultural income derived from such land by the cultivation of tea” means that portion of the income derived from the cultivation, manufacture and sale of tea as is defined to be agricultural income for the purposes of the enactments relating to Indian income-tax.” “8. Determination of agricultural income mentioned in sub-cl. (2) of cl. (a) of s.

2……. Provided further that in cases of agricultural income from cultivation and manufacture of tea the agricultural income for the purposes of this Act shall be deemed to be that portion of the income from cultivation, manufacture and sale which is agricultural income within the meaning of the Indian IT Act and shall be ascertained by computing the income from the cultivation, manufacture and sale of tea as computed for Indian IT Act from which shall be deducted any allowances by this Act authorised in so far as the same shall not have been allowed in computation for the Indian IT Act.” “49. Powers of income-tax authorities to call for papers or documents…….. “Provided that for the purposes of ascertaining agricultural income in regard to tea, the aforesaid taxing authorities may call for any papers produced or liable to be produced before the taxing authorities administering the Indian IT Act.” A reading of the aforesaid Expln. to s. 2(a) would show that for the purpose of the Agrl. IT Act agricultural income derived from cultivation of tea would mean that portion of the income derived from the cultivation, manufacture and sale of tea as is defined to be agricultural income in the IT Act and in the IT Rules and the

proviso to s. 8 quoted above makes it clear that such income is to be ascertained by computing income from the cultivation, manufacture and sale of tea as computed for Indian IT Act. Thus, where computation of the income from cultivation, manufacture and sale of tea is made in accordance with provisions of the IT Act, the Agrl. ITO would have no option but to accept such computation made by the Central IT authority under the IT Act and treat

40% of such income as business income and the balance 60% as agricultural income and thereafter allow from such 60% deemed as agricultural income any allowances authorised by the Agrl. IT Act so far the same have not been allowed in the computation by the Central IT authority under the IT Act. But where while computing the income from cultivation, manufacture and sale of tea under the IT Act, the Central IT authority acts contrary to the provisions of the IT Act or the IT Rules, such a computation made by the Central IT authority would be liable be rejected as being contrary to the aforesaid last proviso to s. 8 of the Agrl. IT Act. Under the proviso to s. 49 extracted above, authorities under the Agrl. IT Act have been authorised to call for any paper produced or liable to be produced before the taxing authorities administering the IT Act for the purpose of ascertaining agricultural income in regard to tea. The said proviso to s. 49 is obviously meant to ensure that the computation of income from the cultivation, manufacture and sale of tea has been made by the Central IT authority in accordance with the IT Act and the IT Rules. A plain reading of r. 5 of the Agrl. IT Rules makes it clear that in respect of Agricultural income from tea grown and manufactured by the seller in Assam, the portion of net income worked out under the IT Act and left unassessed as agricultural shall only be assessed under the Agrl. IT Act and the first limb of the proviso to the said r. 5 further clarifies that the computation made by the Indian ITO shall ordinarily be accepted by the Assam Agrl. ITO. On a reading of the aforesaid provisions of the Agrl. IT Act and r. 5 as a whole, we are of the view that the Assam Agrl ITO can reject a computation made by the Indian ITO only where thecomputation of income has not been made in accordance with the IT Act or the IT Rules, and where the Agrl. ITO rejects the computation made by the Central IT authority on the ground that he has not computed the income fro cultivation, manufacture and sale of tea in accordance with the provisions of the IT Act and IT Rules, he does not transgress the constitutional limits set out in Art. 246(3) read with under Art. 366(1) of the Constitution but ensures that no part of the agricultural income as defined in Art. 366(1) of the Constitution and in the IT Act and computed in accordance with the IT Act and the IT Rules is left unassessed under the Agrl. IT Act. Hence, the last limb of the proviso to r. 5 of the Agrl. IT Rules authorising the Agrl. ITO to refuse to accept the computation of the Indian ITO where such computation has been made contrary to the provisions of the IT Act or the IT Rules is not only consistent with provisions of the Agrl. IT Act but also within the legislative competence of the State Legislature under Art. 246(3) r/w Art. 366(1) of the Constitution.

16. The decision of the Supreme Court in the case of Anglo-American Direct Tea Trading Co. Ltd. (supra) on which reliance was placed by Dr. Gauri shankar was based on the Expln. to s. 2(a)(2) of the Kerala Agrl. IT Act which is similarly worded as the Expln. to s. 2(a) of the Assam Agrl. IT Act. But on a reading of the entire judgment in the aforesaid case we do not find that the Supreme Court noticed in the Kerala Act any provision similar to the proviso to s. 49 of the Assam Agrl. IT Act quoted above and in fact held that there was no provision in the Kerala Act authorising the Agrl. ITO to disregard the computation of tea income made by the Central IT authority acting under the Central IT Act and that the Agrl. ITO in making assessment of agricultural income was bound to accept the computation of tea income already made by the Central IT authority. In the said case, the Supreme Court, however, observed that under some Acts and Rules including the Assam Agrl. IT Act and Rules, the Agrl. ITO was authorised in special cases to disregard the assessment of the Central IT authority and make a fresh computation of the tea income but did not express any opinion on the construction of such Acts and Rules.In the said case, the Supreme Court further clarified that it should not be understood to have held that the assessment made by the Central ITO was in any way binding on the Agrl. ITO. This decision of the Supreme Court in the case of Anglo-American Direct Tea Trading Co. Ltd. cited by Dr. Gauri shankar, therefore, does not support the appellants.

The next contention of Dr. Gauri Shankar was that assuming that the last limb of the proviso to r. 5 of the Agrl. IT Rules was valid in law, an assessment made by the Central IT authority under the IT Act has to be respected by the Agrl. ITO because of Art. 261(1) of the Constitution which states that full faith and credit shall be given throughout the territory of India to public acts, records and judicial proceedings of the Union and every State. In support of this contention, he relied on the decision of the Madras High Court in Kannan Devan Devan Hills Produce Co. Ltd. vs. State of Madras (1966) 59 ITR 184 (Mad) : TC 31R.103 as well as the decision of the Supreme Court in State of Tamil Nadu vs. Kannan Hills Produce Co. Ltd. 1972) CTR (SC) 354 : (1972) 84 ITR

475 (SC) : TC 31R.100 confirming the said decision of the Madras High Court. He also relied on the judgment of the Madras High Court in the case of Kishinchand Chellaram & Ors. vs. Joint CTO, Chintadripat Division (1968)

21 STC 367 (Mad). Mr. Bhuyan, learned Advocate General, however, submitted that the aforesaid decisions were rendered in the particular facts of the cases before the Court and were not applicable to the facts of the present case.

In the case of Kishinchand Chellaram & Ors. (supra), the Revenue took a stand before the Madras High Court that terylene, terene, dacron, nylon, nylex etc. were not artificial silk despite the consistent view of the Central Government that these goods were artificial silk, and the Madras High Court took the view that Art. 261 of the Constitution was a pointer to the principle that a certain uniformity should prevail with regard to the public acts of the Union and every State and that no distinct, independent and telling circumstances had been brought to the notice of the Court for reopening the sales-tax assessments in respect of these goods. On a perusal of the decision of the Madras High Court in the case of Kannan Devan Hills Produce Co. Ltd. (supra) we find that the facts were that the petitioner company in that case owned a tea estate known as the Chittuvarrai Estate comprising of 1.043 acres of tea computation. Out of the said 1.043 acres, 1,006.60 acres were situated in the State of Kerala, while the balance of 36.04 acres were situated in State of Madras. The petitioner’s case was that Chittuvarrai Estate was worked as one unit as it had only one factory for manufacture of tea grown in the Kerala and the Madras portion of the Estate. The managerial, supervisory and clerical staff as well as the estate’s labour force were combined for the said entire Chittuvarrai Estate. The expenses were incurred for the maintenance of the estate together as one unit and the produce of the entire estate was manufactured and sold together. The accounts were maintained for the whole Estate and there was no separate account of Madras portion of the Estate. For the asst. yrs. 1956-57 to

1958-59, the Agrl. ITO, Batlagundu in Madras State made assessments for the purpose of agricultural income tax accepting the computation made by the Central ITO and taking only the balance of 60% for the purpose of agricultural income. But for the asst. yr. 1960-61, the said Agrl. ITO, Batlagundu came to the conclusion that the basis of computation adopted by the Central IT authority for computing the proportion of income under the Indian IT Act attributable to 36.40 acres of the Chittuvarrai Estate situated in the Madras State was incorrect and substituted a different computation for the purpose of calculating the income and after such a computation, he took 60% of it as agricultural income assessable in the Madras State. For the asst. yrs. 1956-57 to 1958-59, the Agrl. ITO also issued notices under s. 35 of the Madras Agrl. IT Act for reassessment. The petitioner moved the Madras High Court and contended that the computation made by the Central ITO was binding on the Agrl. ITO for computing agricultural income from tea. In support of this contention, the petitioner inter alia relied on Art.

261(1) of the Constitution. The High Court took the view that in the facts of that case the Agrl. ITO had refused to accept the computation made by Central ITO for totally unsatisfactory and unjustifiable reasons and set aside the order of assessment but did not give any finding on the abstract question that computation made by the Central ITO was legally binding on the Agrl. ITO. On the matter being carried to the Supreme Court by the State of Tamilnadu, the Supreme Court took note of the fact that under the proviso to r. 7 of the Madras Agrl. IT Rules which is similarly worded as the proviso to r. 5 of the Assam Agrl. IT Rules, the Agrl. ITO has been enjoined to ordinarily accept the computation made by the Central ITO and the High Court went into the facts and figures of various assessments and came to the conclusion that the Agrl. ITO had not given sufficient reasons for not accepting the Central ITO computation and on these facts did not interfere with the judgment of the High Court and thought it unnecessary to express any opinion on the question whether in every case the Agrl. ITO is bound to accept the computation made by the Central IT authorities.

The real question, therefore, is whether the reason given by the Agrl. ITO, Assam, in the three impugned notices dt. 3rd Aug., 1992 for proposing to compute the agricultural income of the appellant No. 1 after refusing to accept the assessments made by the Central IT authority are such as would call for interference by this Court under Art.

226 of the Constitution. According to Dr. Gauri Shankar, learned counsel for the appellants, the only reason given in the three impugned notices is that a circular issued by the CBDT states that deductions allowable under Chapter VIA of the IT Act are to be allowed after application of r. 8 of the IT Rules, whereas it appears from the records that deductions under s. 80HHC falling under Chapter VIA of the said Act to the extent of Rs. 44,98,373, Rs.

1,05,00,000 and Rs. 90,00,000 for the asst. yrs. 1985-86, 1986-87 and 198788 respectively had been allowed by the Indian IT authority before application of r. 8 of the IT Rules. Mr. Bhuyan, learned Advocate General, on the other hand, submitted that a reading of the impugned notices would show that it is not the circular issued by the CBDT which was the basis for the impugned notices. According to him, the actual reason is that the action of the

Indian IT authority in allowing the aforesaid deduction under s. 80HHC of the IT Act before application of r. 8 of the IT Rules was contrary to law and the circular issued by the CBDT was only cited in the impugned notices in support of the said reason. We find full force in the said submission of Mr. Bhuyan, the learned Advocate General. Bereft of all superfluity, the reason given by the Agrl. ITO, Assam, in three impugned notices for proposing to compute the agricultural income of the appellant for the three assessment years in question after refusing to accept the computation made by the Central IT authority is that the Central IT authority had allowed deductions under s.

80HHC before application of r. 8 of the IT Rules which was not permissible under law.

Dr. Gauri shankar, learned counsel for the appellants, however, submitted that this view taken by the Agrl. ITO, Assam, that deductions under Chapter VIA of the IT Act and in particular s. 80HHC thereof can only be allowed after application of r. 8 of the IT Rules as well as the circular of the CBDT cited in favour of the said reason are contrary to the law laid down by the Madras High Court in the case of Commr. of Agrl. IT & Anr. vs. Periakaramalai Tea & Produce Co. Ltd. & Ors. (supra), wherein a Division Bench of the Madras High Court has held that the income derived from the sale of tea grown and manufactured by the seller in India shall be computed as income derived from business in accordance with the provisions of the IT Act after allowing deductions including those in Chapter VIA of the said Act and 40% of such income is chargeable to income-tax and the balance 60% is to be treated as agricultural income for the purpose of agricultural income-tax. Dr. Gauri Shankar further submitted that the aforesaid decision of the Division Bench of Madras High Court has been followed by the Madras High Court in the case of Stanmore (Anamallay) Estates Ltd. vs. Government of Madras (1973) 92

ITR 163 (Mad).

We have carefully read the aforesaid two judgments of the Division Bench of Madras High Court and we respectfully disagree with the broad proposition laid down therein that deductions under Chapter VIA of the IT Act have to be first allowed for computing the business income from tea and thereafter 40% of such income is to be treated as business income liable to income-tax under the IT Act and the balance 60% is to be taken as agricultural income for the purposes of agricultural income tax. In the three decisions of the Supreme Court in the cases of Karimtharuvi Tea Estate Ltd., Anglo-American Direct Tea Trading Co. Ltd. and Tata Tea Ltd. & Ors. (supra), the Supreme court took a view that the consequence of the r. 24 of the IT Rules, 1922 and r. 8 of the IT Rules, 1962 was that the income derived from the sale of tea grown and manufactured by a seller in India has to be computed first in accordance with the provisions of s. 10 of the Indian IT Act, 1922 or ss. 28 to 44 of the IT Act, 1961 by allowing deductions towards expenses incurred for the purpose of earning such income and thereafter 40% of such income so computed has to be treated as income from business and liable for income-tax and 60% of the income deemed to be agricultural income liable for agricultural income-tax after allowing deductions permissible under the law relating to agricultural income-tax. In the said three decisions of the apex Court, there was no discussion of deducting any allowances under the IT Act such as those falling under Chapter VIA of the said Act which were not of the nature of expenses incurred by an assessee for the purpose of earning such income from sale of tea grown and manufactured in India. This would be clear from the following observations of the Supreme Court in the case of Karimtharuvi Tea Estates Ltd. : “The result of r. 24 is that the income derived from the sale of tea grown and manufactured by the seller is to be computed in the first instance as if it was income derived from business. Consequently, the income would be computed in accordance with the provisions of s. 10 of the IT Act. Clause (xv) of sub-s. (2) of s. 10 provides that in computing the income any expenditure by an assessee not being an allowance of the nature described in any of the cls. (i) to (xiv) inclusive and not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purpose of such business, would be deducted. Of the income so computed, 40 per cent is, under r. 24, to be treated as income liable to income-tax and it would follow that the other 60 per cent only will be deemed to be “agricultural income” within the meaning of that expression in the IT Act.” Similarly, in the case of Anglo-American Direct Tea Trading Co. Ltd., the apex Court reasoned as follows : “The question arising in these appeals is whether the Agrl. ITO making an assessment of agricultural income under the Kerala Agrl. IT Act is bound to accept the assessment of the income which has already been made by the Central income-tax authorities under r. 24 of the IT Rules, 1922, r/w s. 10 of the Indian IT Act, 1922, or under r. 8 of the IT Rules, 1962, r/w ss.

28 to 44 of the IT Act, 1961. We think that this question should be answered in the affirmative. Income from sale of tea grown and manufactured by the seller is derived partly from business and partly from agriculture. This income has to be computed as if it were income from business under the Central IT Act and Rules. 40 per cent of the income so computed is deemed to be income derived from business and assessable to non-agricultural income-tax. The agricultural income taxable under the Kerala Act is 60 per cent of the income so computed after deducting therefrom the allowances authorised by s. 5 of the Kerala Act in so far as the same has not already been allowed in the assessment under the Central IT Act.” And in the case of Tata Tea Ltd. & Ors. (supra) the apex Court explained : “A perusal of the aforesaid r. 8(1) makes it clear that under the said rule, income from the sale of tea grown and manufactured by a seller in India has to be computed as if it were income derived from business which would imply that the deductions allowable under the Act of 1961 in respect of income derived from business would be allowable in the case of income derived from the sale of tea grown and manufactured by a seller and further allowance would be granted as set out in r. 8 (2) and 40 per cent of the income so computed would be deemed to be liable to the levy of income-tax and the balance of the income would be liable to tax as agricultural income subject to such further deductions as the law pertaining to the levy of agricultural income-tax might allow.” emphasis, italicised in print, supplied] Thus deductions under the IT Act which were in the nature of expenses incurred for the purpose of earning income derived from sale of tea grown and manufactured by the seller was only to be allowed in computation of such income before application of r. 8 of the IT Rules, 1962 and allowances which were not really in the nature of expenses were not to be deducted from computation of such income before application of r. 8. This view is further reinforced by the provision in s. 29 of the IT Act to the effect that income from profits and gains of business shall be computed in accordance with ss. 30 and 43D of the IT Act.

22. Dr. Gauri Shankar, however, submitted that a deduction does not cease to be an item of expenditure merely because it is not included in ss. 28 to 43D of IT Act, 1961 and is included in Chapter VIA of the IT Act, 1961 and that arrangement of sections in one chapter or the other in the IT Act can as not be conclusive as to the nature of a particular allowance. Hence, we have to consider whether the allowance under s. 80HHC of the IT Act is by way of deduction for expenses incurred for earning the income from sale of tea grown and manufactured by a seller. The relevant portion of the said s. 80HHC is extracted hereinbelow : “80HHC. (1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export out of India of any goods or merchandise to which this section applies, there shall, in accordance with and subject to the provisions of this section be allowed, in computing the total income of the assessee, a deduction of the (profits) derived by the assessee from the export of such goods or merchandise.”

[emphasis, italicised in print, added]

A bare reading of s. 80HHC quoted above shows that it is not an item of expense incurred for earning profits from the sale of tea grown and manufactured by a seller but is a deduction of profits derived by the assessee from export of goods or merchandise from India. In our view, the allowance under s. 80HHC cannot be allowed as deduction for computing income derived from the sale of tea grown and manufactured by the seller before application of r. 8 of the IT Rules, 1962 and that out of the such income computed without deducting the allowance under the said s. 80HHC of the IT Act 40% is to be treated as income derived from profits and gains of business and the allowance under s. 80HHC can be allowed only out of such profits and gains of business constituting the 40% of the income. The balance 60% of the income is to be deemed as agricultural income and out of such agricultural income only such allowances as are permissible under the Agrl. IT Act can be made. This is because the said 60% of the income deemed as agricultural income falls within the domain of the State Legislature out of which no further allowances not of the nature of expenses can be allowed except those which are permissible under the Agrl. IT Act. In the instant case, in the three impugned notices it is alleged that the allowances of Rs. 44,98,373, Rs. 1,05,00,000 and Rs. 90,00,000 under s. 80HHC of the IT Act for the asst. yrs. 1985-86, 1986-87 and 1987-88 have been made before application of r. 8 of the IT Rules and not from the 40% of the income after application of the said r. 8. It is, therefore, difficult for us to hold that the reason given in the impugned notices for proposing to compute the agricultural income after refusing to accept the computation of the Indian ITO is totally unsatisfactory or unjustifiable. On the contrary, we find from the said reason given in the impugned notices that the computation made by the Indian ITO is proposed to be rejected under the proviso to r. 5 of the Agrl. IT Rules because the said computation has been made contrary to the provisions of the IT Act and the IT Rules and the last proviso to s. 8 of the Agrl. IT Act.

23. Dr. Gauri Shankar lastly contended that so far as the asst. yr. 1985-86 is concerned, the assessment of agricultural income had been completed and the impugned notice dt. 3rd Aug., 1992 for the said assessment year was for reopening such assessment already done and it is settled by the Privy Council in the case of CIT vs. Mahaliram Ramjidas (1940) 8 ITR 442 (PC) that before initiating proceedings under s. 34 of the Indian IT Act, 1922, the ITO must, on the information before him, and in good faith consider that he has good ground for believing that the assessee’s profits for some reason escaped assessment. He also cited the decision of the Supreme Court in the case of ITO vs. Lakhmani Mewal Das 1976 CTR (SC) 220 : (1976) 103 ITR 437 (SC) in which it has been held that the reasons for the formation of such belief for reopening an assessment must have rational connection with the escapement of income from assessment because of his failure to disclose truly all material facts, and although the Court cannot examine the sufficiency or adequacy of the material before the AO for initiating proceedings for reopening the assessment, it can examine the relevancy of the material before the AO to find out whether the reasons given by the AO for reopening the assessment have any nexus with escapement of income and in the present case the reason given by Agrl. ITO in the impugned notice dt. 3rd Aug., 1992 has no such rational nexus with escapement of the agricultural income of the appellant No. 1 from assessment.

24. While we agree with Dr. Gauri shankar that the reason for reopening an assessment under s. 30 of the Agrl. IT Act must have a nexus with escapement of agricultural income, we are of the view that s. 30 of the Agrl. IT Act is not hedged in with the limitations of s. 34 of the Indian IT Act, 1922. The said s. 30 is quoted herein below : “30. Income escaping assessment.—If for any reason any agricultural income chargeable to agricultural income-tax has escaped assessment for any financial year, or has been assessed at too low a rate or has been the subject of undue relief under this Act, the Superintendent of Taxes or Agrl. ITO may, at any time within eight years of the end of that financial year serve on the person liable to pay agricultural income-tax on such agricultural income, or in the case of a company on the principal officer thereof, a notice containing all or any of the requirements which may be included in a notice under sub-s. (2) of s. 19, and may proceed to assess or reassess such income, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub- section.”

As per the aforesaid section, if for any reason any agricultural income chargeable to agricultural income-tax has escaped assessment for any financial year, the Agrl. ITO may proceed to reassess the income. In the case of Kameswar Singh vs. State of Bihar AIR 1959 SC 1308, s. 26 of the Bihar Agrl. IT Act, which is similarly worded as the aforesaid s. 30 of the Assam Agrl. IT Act, came in for interpretation before the apex Court. It was contended that unless fresh information comes into possession of the assessing authority, no reassessment can be done by the AO and the decisions under s. 34 of the Indian IT Act, 1922 were cited in support of the aforesaid contention. The Supreme Court rejected the said contention and held: “We may say at once that the words of s. 26 of the Act do not involve possessing of or coming by some fresh information. The section says : `If for any reason any agricultural income chargeable to agricultural income-tax has escaped assessment for any financial year…..the Agrl. ITO……may proceed to assess….such income….’. The use of the words “any reason” which are of wide import dispenses with those conditions by which s. 34 of the Indian Actiscircumscribed Emphasis, italicised in print, supplied]

It is stated in the impugned notice for the asst. yr. 1985-86 that it appeared from the record that Rs. 44,98,373 has been allowed by the Indian IT authority under s. 80HHC before application of r. 8 of the IT Rules. As discussed above, such allowance under s. 80HHC of the IT Act before application of r. 8 of the IT Rules has resulted in allowing a deduction of Rs. 44,98,873 from the 60% of the income of the appellant No. 1 deemed as agricultural income from which only the allowances authorised by the Agrl. IT Act were only permissible, and the said amount of Rs. 44,98,373 has escaped assessment under the Agrl. IT Act. There was thus a reason indicated in the impugned notice under s. 30 of the said Act which had a rational nexus with escapement of agricultural income from agricultural income-tax for the asst. yr. 1985-86 and it is not possible to take a view that the Agrl. ITO, Assam had no jurisdiction to issue the same.

25. For the reasons stated above, the appellants are not entitled to any of the reliefs claimed in the writ petition as well as in this appeal. The appeal is accordingly dismissed and the interim order of stay passed on 9th Feb., 1995 is vacated. But considering the facts and circumstances of the case, the parties shall bear their own costs.

[Citation : 219 ITR 59]

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