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 5TH FEBRUARY 2008 / 16TH MAGHA 1929 OTC.No. 35 of 2005() -------------------- AITA.99/1997 of DY.COMR.KERALA AGRL.IT & STAT,KOTTAYAM .................... PETITIONER: ---------------------------- PLANTATION CORPORATION OF KERALA LIMITED, KOTTAYAM. BY ADV. SRI.JOSEPH MARKOSE (SR.) SRI.MITHUN MARKOS RESPONDENTS: ------------- STATE OF KERALA, REPRESENTED BY THE SECRETARY (TAXES), TRIVANDRUM. BY GOVERNMENT PLEADER SRI. K.P. PRADEEP THIS OTHER TAX CASES HAVING BEEN FINALLY HEARD ON 05/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & T.R. RAMACHANDRAN NAIR, JJ. -------------------------------------------- O.T.C. No. 35 OF 2005 -------------------------------------------- Dated this the 5th day of February, 2008 JUDGMENT C.N. Ramachandran Nair,J. This is a Tax revision case filed under Section 78 of the Agrl. Income Tax Act against the order of the Tribunal disposing of the AIT appeal filed by the petitioner for the assessment year 1985-86. We have heard senior counsel appearing for the revision petitioner and Government Pleader for the respondent. 2. Petitioner is a fully owned Government of Kerala company engaged in agricultural operations, mainly cultivation of rubber and cashew. The questions raised in this Tax Revision Case pertain to full or partial disallowance of large number of items of expenditure claimed by the assessee. We notice from the Tribunal's order that disallowances are confirmed in full or in part mainly for the reason that details and evidence are not available. In the first place, we are not inclined to entertain the challenge against these findings at this distance 2 of time because even if matter is remanded by us as requested by assessee's counsel it may not be possible to verify the accounts and records, which are 23 years old, as the same pertain to the year ending 31.3.1985. We do not find any justification for disallowing expenditure in the form of vehicle tax paid for the vehicle admittedly used for transport of latex. Similarly we find there is some substance in the assessee's grievance against variation of closing stock valuation by the assessing officer. Further we find that the Tribunal has confirmed disallowance of expenditure on maintenance of inspection bungalow which is the building used by assessee's supervisory staff in the Estate. The Tribunal has assumed that the assessee has other income from manufacturing and trading and consequently disallowance is made. We do not find any justification for the Tribunal's assumption. As the assessee is essentially engaged in agricultural activities only there is no justification for making disallowance on the assumsption of income from manufacturing and trading by the assessee. We are of the view that the assessee is entitled to entire expenditure claimed for the maintenance of inspection bungalows. 3 Similarly we find that the Tribunal has without any justification sustained the addition of differential amount claimed by the assessee, that is the original claim and the revised claim under the revised return pertaining to security expenses. When the assessee itself filed revised return reducing the claim, there is no justification to make addition of the differential amount. We therefore direct the Assessing Officer to delete the addition towards security expenses. Similarly after holding that assessee's claim for bonus in terms of the revised return is allowable, the Tribunal without any justification confirmed the addition of differential amount that is the amount of bonus claimed in the original return and the bonus covered by the revised return. We direct the assessing officer to delete the addition on this account also. So far as the disallowance of claim of interest and penal interest is concerned, we do not find any ground to interfere with the same as the same pertains to loan availed for the up-keep and maintenance of immature area wherefrom no agricultural income is derived. Therefore we are of the view that this claim is rightly rejected. The Tax Revision Case is accordingly disposed of directing the 4 assessing officer to modify the assessment on the above referred issues in terms of the directions given above. We do not find any ground to interfere with the order of the Tribunal on other issues because the Tribunal has confirmed disallowance for want of evidence. (C.N.RAMACHANDRAN NAIR) Judge. (T.R.RAMACHANDRAN NAIR) Judge. kk 5