IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR TUESDAY, THE 22ND JANUARY 2008 / 2ND MAGHA 1929 OTC.No. 7 of 2005() ------------------- AITA.147/1999 of AGRL.I.T.APPELLATE TRIBUNAL, ADL.BENCH,ERNAKULAM .................... PETITIONER --------------------------- THE MALANKARA PLANTATIONS LIMITED, (FORMERLY THE MALANKARA RUBBER & PRODUCE COMPANY LIMITED), KOTTAYAM, REPRESENTED BY ITS MANAGING DIRECTOR, MR.J.K.THOMAS. BY ADV. SRI.JOSEPH MARKOSE (SR.) SRI.MITHUN MARKOS RESPONDENTS: ------------- STATE OF KERALA, REPRESENTED BY THE SECRETARY (TAXES), TRIVANDRUM. BY G.P. SRI.K.P.PRADEEP THIS OTHER TAX CASES HAVING BEEN FINALLY HEARD ON 22/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & T.R.RAMACHANDRAN NAIR, JJ. .................................................................... Other Tax Case No.7 of 2005 .................................................................... Dated this the 22nd day of January, 2008. JUDGMENT C.N.Ramachandran Nair, J. Since Government Pleader has taken notice, O.T.C. is free of defect. 2. We have heard Senior counsel Sri.Joseph Markose appearing for the revision petitioner and the Government Pleader for the respondent. The revision arises from the Tribunal's order for the assessment year 1994-95. Various questions raised in the revision case pertains to disallowance of some items of expenditure claimed by the assessee. The first item pertains to disallowance of investment allowance on effluent treatment plant. The Tribunal has disallowed the claim for the reason that assessee did not prove the claim with evidence. Counsel for the petitioner referred to assessment order wherein the Assessing Officer allowed depreciation on effluent treatment plant. The findings in the assessment order go to show that the assessee has established with evidence investment in effluent treatment plant and that is the reason why depreciation originally proposed for disallowance was later allowed. However, the Assessing Officer has not considered whether effluent treatment plant is covered by notification issued 2 by the Government under Section 7(5) of the Agricultural Income Tax Act qualifying for investment allowance. Since the Tribunal's assumption that evidence on investment was not available is incorrect, we reverse the finding of the Tribunal and direct the officer to consider assessee's eligibility for investment allowance on effluent treatment plant after verifying the items notified by the Government under Section 7(5) of the AIT Act. So far as disallowance of bank charges for import of centrifuging machinery is concerned, even though counsel for the petitioner submitted that the expenditure claimed was incurred for raising of bank loan, we are of the view that the lower authorities rightly disallowed the claim as it is capital in nature to be added to cost of capital goods imported for the purpose of depreciation and other benefits. The last item of disallowance contested is depreciation on additions made during the relevant previous year. Disallowance was made for want of proof. We do not find any question of law arising from this finding. We, therefore, confirm the findings of the Tribunal on this issue also. The tax revision case is accordingly disposed of with the above directions. C.N.RAMACHANDRAN NAIR Judge T.R.RAMACHANDRAN NAIR Judge