Deductibility of turnover tax was denied because only tax paid in respect of agricultural produce qualifies under the agricultural income law.

Turnover tax paid under the Karnataka Sales Tax Act was held not deductible in computing agricultural income under section 5(1)(a)(ii) of the Karnataka Agricultural Income-tax Act, because that provision allows deduction only of excise duty or tax paid in respect of agricultural produce. A tax on turnover under the sales tax law is distinct from a tax paid in respect of agricultural produce, so the statutory condition was not met and the deduction claim failed.

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Issues: Whether turnover tax paid under the Karnataka Sales Tax Act, 1957 is deductible while computing agricultural income under section 5(1)(a)(ii) of the Karnataka Agricultural Income-tax Act, 1957.

Analysis: Section 5(1)(a)(ii) permits deduction only of excise duty or tax paid in respect of agricultural produce. The amount claimed by the assessee was turnover tax paid on turnover under the Karnataka Sales Tax Act, 1957, which is distinct from a tax paid in respect of agricultural produce. The claimed deduction therefore did not satisfy the statutory requirement.

Conclusion: The deduction was not allowable and the rejection of the assessee's claim was upheld.

Ratio Decidendi: A tax is deductible under section 5(1)(a)(ii) only if it is paid in respect of agricultural produce; turnover tax paid on turnover under the sales tax law does not qualify.

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