Proof of exclusive agricultural nexus governs deduction of staff wages; reasonable apportionment upheld where evidence is lacking.

Expenditure on salaries and wages is deductible only to the extent it is shown, with material evidence, to relate wholly and exclusively to agricultural activity. Where the assessee fails to produce attendance records, expenditure details or other proof of exclusive deployment, and the common establishment serves mixed agricultural and non-agricultural purposes, the authorities may reasonably apportion the expense between the two activities. On the facts described, the revisional court found no perversity in the estimation, held that the burden of proof had not been discharged, and sustained the restriction of deduction to the agricultural component.

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Issues: Whether the expenditure claimed towards salaries and wages of estate guards, supervisory staff and labourers was wholly and exclusively relatable to agricultural activity so as to be fully deductible, and whether the authorities were justified in apportioning the expenditure between agricultural and non-agricultural activities.

Analysis: The assessee claimed that the staff and labour were engaged only for agricultural operations, but produced no documentary evidence such as attendance registers, expenditure records or other material to establish exclusive deployment for agricultural purposes. The statutory authorities found that the estate guards also protected township and industrial assets, and that the common establishment served mixed purposes. In the absence of proof, the authorities were entitled to estimate the portion attributable to agricultural activity and allow deduction only to that extent. The revisional court found no perversity or illegality in the estimation or in the conclusion that the onus had not been discharged by the assessee.

Conclusion: The apportionment of expenditure was upheld and the claim for full deduction was rejected.

Final Conclusion: The revisional challenges failed because the assessee did not establish exclusive nexus between the disputed expenditure and agricultural income, and the authorities' reasonable apportionment was sustained.

Ratio Decidendi: An assessee claiming deduction of expenditure must prove with material evidence that the expenditure was incurred wholly and exclusively for the taxable activity; failing that, the authorities may lawfully apportion the expenditure on a reasonable estimate.

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