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. 27 of 2005() -------------------- AITA.109/1996 of AGRL.I.T.ADL.BENCH,ERNAKULAM .................... PETITIONER/APPELLANT:- ------------------------------------- M/S. RAM BAHADUR THAKUR LIMITED, `SIDDHARATH', WILLINGDON ISLAND, COCHN-682 003, REPRESENTED BY ITS CHIEF EXECUTIVE (TAXATION & FINANCE), MR. D.D. SINGH. BY ADV. SRI.JOSEPH MARKOSE (SR.) SRI.MITHUN MARKOS RESPONDENT/RESPONDENT:- ------------------------------------------ STATE OF KERALA, REPRESENTED BY THE SECRETARY (TAXES), THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER SRI.K.P.PRADEEP. THIS OTHER TAX CASES HAVING BEEN FINALLY HEARD ON 22/01/2008 ALONG WITH OTC.NO.28/2005 & OTHER CONNECTED CASES, THE COURT ON THE SAME DAY PASSED THEFOLLOWING: C.N.RAMACHANDRAN NAIR & T.R.RAMACHANDRAN NAIR, JJ. ========================== O.T.C. Nos.27, 28 & 34 of 2005. ========================== Dated this the 22nd day of January, 2008. C.N.Ramachandran Nair, J. J U D G M E N T These Tax Revision Cases filed under Section 78 of the Agricultural Income Tax Act, 1991 arise from the orders of the Tribunal for the assessment years 1992-'93, 1995'96 and 1997-'98. 2. We have heard Senior Counsel Sri.Joseph Markos appearing for the petitioner and the Government Pleader appearing for the respondent. 3. The only issue that arises for consideration for the assessment years 1992-'93 is the addition of excess provision written back by the assessee in the accounts. Counsel submits that excess provision represents excess over actual amount payable to UPASI (United Planters' Association of South India) towards subscription. Since the assessee mainly is a tea company, the subscription of UPASI O.T.C. Nos.27, 28 & 34 of 2005. 2 was fully claimed against central income and when excess provision was written back the assessee offered the same for income-tax assessment which is clear from the computation of income tax wide Annexure-E and the assessment order Annexure-F produced in Court. It is seen that the amount was assessed to Central Income-Tax. If this is the exact position then 60% of the amount written back by the assessee gets assessment under Agricultural Income Tax based on the income tax assessment. However, the Government Pleader submits that a portion of the provision was claimed against other income and it was separately allowed and so much so when excess provision was written back, there has to be addition in the Agricultural Income Tax assessment also. We find that the Tribunal has not considered the Central Income Tax assessment while considering the issue. In the circumstances, we set aside the order of the Tribunal on this ground and direct the assessing officer to verify the factual position and if any provision was not separately allowed in the Agricultural Income Tax assessment he will not make any separate addition but will adopt the tea income as computed wherein the amount is assessed. The assessee will produce the records for revision of assessment, to the extent required. O.T.C. Nos.27, 28 & 34 of 2005. 3 4. The issue raised for the assessment years 1995-'96 is against the computation of opening stock. It is seen from the assessment order that the assessee objected and requested to adopt the closing stock of the previous year. It is submitted that the stock of cardamom sent to Delhi was not sold and according to the assessee the same has been accepted by the assessing officer. If that be the position the opening stock has to be modified adopting the closing stock of the previous year. The assessing officer is directed to verify the final assessment of previous year and adopt opening stock for this year the same figure as the closing stock for the previous year approved in the final proceedings. 5. Another ground raised for the assessment year 1997-'98 is the contention against assessment of scrap value. The assessee's case is that the income from scrap is included under the Central Income-Tax for the computation of tea income. If this is true, then there is no scope for addition of 60% of the income treating it as Agricultural income. This is a matter for verification by the assessing officer. The last issue raised for the year 1995-96 as expenses claimed against the income from minor source. The question whether the expenditure was incurred O.T.C. Nos.27, 28 & 34 of 2005. 4 should be considered by the assessing authority in the light of the decision reported in Commissioner of Agricultural Income-Tax v. Midland Rubber and Produce Co. Ltd. (182 ITR 493). The Deputy Commissioner is directed to consider the claim afresh. The Tribunal's order on this issue is also set aside. The assessing officer should verify and to allow the eligible claims based on the observations above. The Tax Revision Cases are disposed of as above. C.N.RAMACHANDRAN NAIR, JUDGE. T.R.RAMACHANDRAN NAIR, JUDGE. kvs/-