High Court Of Kerala
Commissioner Of Agricultural Income Tax vs. Kartikolam & Alathur Estates Ltd./Plantation Corporation Of Kerala
V.P. Gopalan Nambiyar C.J. & T. Chandrasekhara Menon, J.
IT Refs. Nos. 50 & 108 of 1977
19th December, 1978
Government Pleader, for the Revenue : T.L. Viswanatha Iyer, P.S. Narayanan, K.S. Menon, S. Ramachandran, S.R. Dayananda Prabhu, K. Hymavathy, M. Pathrose Mathai, Joseph Vellapally & Siri Jagan, for the Respondent.
V.P. GOPALAN NAMBIYAR, C.J.:
The question raised in these references relates to the deductibility of certain items of expenditure claimed by the assessee as deduction under s. 5(j) of the Kerala Agrl. IT Act, 1950. That section reads: ” 5. Computation of agricultural income.âThe agricultural income of a person shall be computed after making the following deductions, namely:(j) any expenditure (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 deriving the agricultural income.
2. The expenses sought to be deducted, what may be broadly described, are legal and audit expenses incurred by the assessee and claimed as having been incurred for the purpose of deriving the agricultural income. In IT Ref. No. 50 of 1977, a sum of Rs. 1,894 was claimed as remuneration paid to the auditors. In IT Ref. No., 108 of 1977, a sum of Rs. 7,925.08 was claimed as legal charges., The scope of s. 5(j) of the Act fell for examination before a Division Bench of this Court in Commr. of Agrl. I.T. vs. Malayalam Plantations Ltd. (1979) 8 CTR (Ker) 348: (1978) 115 ITR 624(Ker). The decision was referred to and followed in IT Ref. No. 107 of 1977. In the light of the principle laid down by the above decisions, we have no doubt that the amounts claimed in these cases are deductible under s. 5(j) of the Act. The questions formulated for our opinion in these references are accordingly answered in the affirmative, that is, in favour of the assessee and against the Revenue. There will be no order as to costs.
[Citation : 169 ITR 393]