Litigation expenses in contesting agricultural income-tax assessments are deductible under section 5, following binding precedent.

Expenses incurred in filing appeals, revisions, reference applications and similar proceedings challenging an assessment under the Agricultural Income-tax Act were held to be deductible in computing agricultural income under section 5. The Kerala High Court followed its earlier binding decision that litigation costs spent in contesting the assessment fall within the statutory deductions permitted for agricultural income. The deduction claim was therefore accepted, and the issue was answered in favour of the assessee and against the Revenue.

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Issues: Whether expenses incurred in filing appeals, revisions, reference applications and similar legal proceedings against an assessment under the Agricultural Income-tax Act are allowable deductions in computing agricultural income under section 5 of that Act.

Analysis: The issue was covered by an earlier decision of the same court which held that such expenses, being incurred in contesting the assessment, fall within the deductions permissible in computing agricultural income. Following that binding view, the claim for deduction was accepted.

Conclusion: The expenses are allowable deductions under section 5 of the Agricultural Income-tax Act, and the question was answered in favour of the assessee and against the Revenue.

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