IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN WEDNESDAY, THE 10TH AUGUST 2011 / 19TH SRAVANA 1933 ST.Rev..No. 302 of 2005() ------------------------- AITA.38/1998 of AGRL.I.T.ADL.BENCH,ERNAKULAM .................... REVISION PETITIONER/RESPONDENT/REVENUE. --------------------------------------------------------- STATE OF KERALA, REP. BY THE JOINT COMMISSIONER (LAW) COMMERCIAL TAXES, ERNAKULAM. BY G.P. SRI.MOHAMMED RAFEEQ RESPONDENT/APPELLANT/ASSESSEE. ------------------------ THE HIGH LAND PRODUCE CO.LTD., P.B.NO.1685, PANAMPILLY NAGAR, COCHIN-15. ADV. SRI.A.M.SHAFFIQUE, SENIOR ADVOCATE FOR R1 SRI.E.K.NANDAKUMAR FOR R1 SRI.A.K.JAYASANKAR NAMBIAR FOR R1 SRI.ANIL D. NAIR FOR R1 SMT.PRIYA MAHESH FOR R1 SRI.K.JOHN MATHAI FOR R1 SRI.P.BENNY THOMAS FOR R1 THIS SALES TAX REVISION HAVING BEEN FINALLY HEARD ON 10/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX ANNEXURE A: TRUE COPY OF ASSESSMENT ORDER FOR THE YEAR 1993-94 DT.19.1.96. ANNEXURE B: TRUE COPY OF ORDER OF THE APPELLATE AUTHORITY. ANNEXURE C: TRUE COPY OF ORDER OF THE TRIBUNAL DT.10.10.02. TRUE COPY P.S. TO JUDGE C.N.RAMACHANDRAN NAIR & P.S.GOPINATHAN, JJ. .................................................................... S.T. Rev. No.302 of 2005 .................................................................... Dated this the 10th day of August, 2011. JUDGMENT Ramachandran Nair, J. The question raised in the revision filed by the Revenue is whether the Agricultural Income Tax Appellate Tribunal was justified in allowing deduction of full amount of interest paid on funds borrowed for agricultural purposes from NABARD. We have heard Government Pleader for the petitioner and counsel appearing for the respondent. 2. The assessee is engaged in both tea as well as cardamom cultivation. In the assessment assessee claimed deduction of full interest paid on borrowal from NABARD against agricultural income. The Assessing Officer disallowed 7% probably as attributable to tea area. The Tribunal, however, cancelled the disallowance by upholding assessee's claim for deduction of entire interest against agricultural income. 3. After hearing both sides and after going through the orders, we 2 do not find anything to indicate that part of the loan is diverted for non- agricultural purpose. So much so, the Tribunal rightly cancelled the 7% disallowance. Further, the appeal relates to the assessment year 1993-94 and we do not think there is any scope for further enquiry in the matter, particularly when the amount involved is very low. However, we make it clear that the order followed by the Tribunal in the case of M/S.RAJAGIRI RUBBER AND PRODUCE COMPANY LTD. probably should not be applied in subsequent years because that company is fully engaged in agricultural operations, whereas respondent-assessee is engaged in cultivation of tea as well which partly comes under Central Income Tax for assessment. Revision is dismissed with the above observation. C.N.RAMACHANDRAN NAIR Judge P.S.GOPINATHAN Judge pms