Tea income computation follows Central income-tax findings; State authorities cannot reopen allowed deductions in the agricultural portion.

Tea income is to be split under the constitutional and statutory scheme by deriving the agricultural component from the income computed under income-tax law. The State Agricultural Income-tax Officer cannot adopt a different basis that would enlarge agricultural income or reopen deductions already allowed by the Central income-tax computation. Deductions permitted in the Central assessment bind the State computation for the tea portion, so items 2 and 3 could not be disallowed again. Head office expenditure under item 1 was also allowable, because if the cardamom allocation was not sustainable, the amount had to be treated as relatable to tea cultivation and allowed against tea income.

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Issues: Whether, in computing agricultural income from tea, the Agricultural Income-tax Officer could reopen and vary the computation already made by the Central income-tax authorities so as to disallow deductions already allowed, and whether the assessee was entitled to deduction of the three disputed items.

Analysis: Under the constitutional and statutory scheme governing tea income, the agricultural component is to be derived from the income computed under the income-tax law and the State authorities cannot adopt a different computation that would enlarge the agricultural income beyond the figure reached by the Central authorities. The computation made by the income-tax authorities, including deductions allowed under the applicable income-tax provisions and rules, binds the Agricultural Income-tax Officer for the purpose of assessing the agricultural portion. Items 2 and 3, having been allowed in the Central computation, could not be disallowed afresh. As to item 1, the head office expenditure had in any event been incurred and, if the cardamom allocation was not sustainable, the amount had to be treated as relatable to tea cultivation and allowed against the tea income.

Conclusion: The Agricultural Income-tax Officer could not reopen the Central computation to disallow the deductions, and the assessee was entitled to all three deductions.

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