Section-wide exclusion for immature plantation prevents deduction of rent and interest attributable to plants yielding no agricultural income.

Explanation 2 to Section 5 of the Agricultural Income-tax Act applies to the entire computation provision and is not confined to clause (j), because a general explanation placed at the end of a section governs the section as a whole unless the statute clearly limits it. On that construction, expenditure attributable to immature oil palm plantations from which no agricultural income had arisen could not be deducted. Rent and interest relatable to the immature plantation therefore fell within the statutory prohibition and were not admissible in computing agricultural income.

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Issues: (i) Whether Explanation 2 to Section 5 of the Agricultural Income-tax Act, 1950 is confined only to clause (j) of Section 5 or applies to Section 5 as a whole; (ii) Whether rent and interest attributable to the immature oil palm plantation were deductible in computing agricultural income.

Issue (i): Whether Explanation 2 to Section 5 of the Agricultural Income-tax Act, 1950 is confined only to clause (j) of Section 5 or applies to Section 5 as a whole.

Analysis: Section 5 is a comprehensive provision governing computation of agricultural income by allowing deductions under clauses (a) to (n). Clause (j) is residuary in nature, but that does not truncate the operation of the section or limit an explanation placed at the end of the section. Explanation 2 states that nothing in the section shall entitle a person to deduction of expenditure laid out for the cultivation, upkeep or maintenance of immature plants from which no agricultural income has been derived. The wording is general and is directed to the entire section, and the placement of the Explanation alongside Explanation 1 supports a section-wide application. Recourse to internal or external aids was therefore unnecessary.

Conclusion: Explanation 2 applies to Section 5 as a whole and is not confined to clause (j).

Issue (ii): Whether rent and interest attributable to the immature oil palm plantation were deductible in computing agricultural income.

Analysis: The claimed deductions related to the whole estate, including the area under immature oil palm plants which yielded no agricultural income. To the extent the rent and interest were attributable to such immature plantation, they fell within the prohibition contained in Explanation 2 and could not be allowed as deductions in computing agricultural income.

Conclusion: The deductions for rent and interest relatable to the immature oil palm plantation were not admissible.

Final Conclusion: The exclusion in Explanation 2 governs the entire computation provision in Section 5, and expenditure referable to immature plants from which no agricultural income had arisen cannot be deducted.

Ratio Decidendi: An explanation placed at the end of a computation section and expressed in general terms applies to the section as a whole unless the statute clearly limits it to a particular clause, and expenditure attributable to immature plants yielding no agricultural income is not deductible where the statute so prohibits.

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