IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN MONDAY, THE 26TH MAY 2008 / 5TH JYAISHTA 1930 OTC.No. 9 of 2006() ------------------- AITA.64/2003 of AGRL. INCOME TAX APPELLATE TRIBUNAL, ADDL. BENCH, TVM .................... PETITIONER/APPELLANT: ---------------------------- BHAVANI TEA AND PRODUCE COMPANY LTD., PUNALUR. BY ADV. SRI.RAMESH CHERIAN JOHN RESPONDENT/RESPONDENT. ------------------------ STATE OF KERALA, REPRESENTED BY THE COMMISSIONER OF COMMERCIAL TAXES, TRIVANDRUM. BY G.P. SRI.TEKCHAND THIS OTHER TAX CASES HAVING BEEN FINALLY HEARD ON 26/05/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. .................................................................... O.T.C. No.9 of 2006 .................................................................... Dated this the 26th day of May, 2008. JUDGMENT Ramachandran Nair, J. This O.T.C. is filed against the order of the Tribunal confirming first appellate authority's order pertaining to allocation of overhead expenditure. We have heard counsel for the petitioner and Government Pleader. On going through the Tribunal's order we find that the petitioner's apprehension is out of place because the Tribunal has only upheld in principle the allocation of overhead expenditure in proportion to direct expenditure. The petitioner's case is that if re-allocation is made, original allocation made by the petitioner based on cultivated area and accepted in Central Income tax assessment has to be varied which is not possible because of the finality achieved to the assessment order passed by the Central Income Tax Officer in respect of tea income. We find the Tribunal has specifically stated that the Central Income Tax assessment order on tea income should not be disturbed. The disallowance of overhead expenditure to the extent permissible under the Agricultural Income Tax Act is not going to affect the Central Income Tax assessment order. In fact if additional disallowance in 2 the AIT assessment leads to an inadequate claim made and allowed in the Central Income tax assessment, probably petitioner can file a belated appeal against the Central Income Tax assessment. However, so long as computation of tea income by the Central Income Tax authorities is adopted by the Agricultural Income Tax Officer under Section 39 of the A.I.T. Act, we find the matter stands remanded by the Tribunal after holding that in principle the allocation of overhead expenditure in proportion to direct expenditure is quite justified. We find no justification to deviate from decision of the Tribunal in principle. Since the matter only stands remanded for the Assessing Officer to pass orders, we find no ground to interfere with the order of the Tribunal and therefore, dismiss the O.T.C. C.N.RAMACHANDRAN NAIR Judge V.K.MOHANAN Judge pms