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<h1>Court allocates railway expenses based on ton-mileage, rules sugarcane transport receipts as manufacturing income.</h1> The court ruled in favor of allocating expenses and depreciation on railway lines between agricultural and manufacturing activities based on the ... Business Expenditure, Business Income, Depreciation, Income, Railway Lines, Ton Mileage Issues:1. Allocation of expenses of running railway lines between agricultural and non-agricultural operations based on tonnage carried.2. Correctness of Tribunal's basis for apportioning expenses incurred on railway lines.3. Allocation of depreciation on railway lines between agricultural and manufacturing activities based on tonnage carried.4. Assessability of railway transport receipts as income from manufacturing business for assessment years 1962-63 and 1965-66.Analysis:- The judgment pertains to income-tax references for assessment years 1962-63, 1963-64, and 1965-66.- Questions before the court included the allocation of expenses of running railway lines, correctness of the Tribunal's basis for apportioning expenses, and allocation of depreciation on railway lines between agricultural and manufacturing activities.- Previous High Court judgment established 'ton-mileage basis' as the proper method for allocation, deviating from the tonnage carried basis.- The court determined that expenses and depreciation on railway lines should be allocated based on the 'ton-mileage basis' as per the previous judgment.- The Tribunal's basis for apportioning expenses on railway lines was deemed incorrect in law.- Regarding the assessment years 1962-63 and 1965-66, the court examined the assessability of railway transport receipts as income from manufacturing business.- The court considered the recovery of freight charges for carriage of sugarcane from outsiders to the factory, where the obligation to pay freight was on the cane-growers.- The court found that the recovered freight charges were not attributable to agricultural activities but were related to the transportation of sugarcane for manufacturing purposes.- Consequently, the court ruled in favor of assessing the entire freight receipts as income from manufacturing business for both assessment years.- The judgment concluded by answering the questions related to the assessment years 1962-63 and 1965-66 in the affirmative and against the assessee, with no order as to costs.
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