TaxTMI 
TaxTMI 
1980 (12) TMI 103
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....asst. yr. 1978-79, the relevant accounting period was 17th Aug., 1976 to 16th Aug., 1977. The appellant disclosed income upto 30th April, 1977 in respect of his "share" from the properties held as 'tenants-in-common'. From 1st May, 1977 onwards the appellant disclosed income from land which fell to his share. The Agrl. ITO made various additions in computation of income, and disallowed some expenses. 3. The assessing authority made such additions to the entire combined property viz., (1)Nagamony Sastha and 3 others(2)Nagamony Sastha & Bros., upto 30th April, 1977 and adopted the proportionate share of each member. It is common ground that a reduction in income of the property will result in corresponding reduction of each member who has filed a separate here. 4. In this appeal the appellant disputed some of the additions. The ld. Authorised Representative for the appellant reiterated the arguments already raised in the grounds of appeal. The ld. State Representative relied on the orders of the lower authorities. 5. We have heard both sides and perused the connected records. 6. The first point of dispute is about the disallowance in Nagamony Sastha and others. The disallowance o....
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.... 311, the High Court observed: "What s. 5(k) requires is that the borrowed amount should have been actually spent on the land". This has been explained as "for any agricultural or horticultural purposes or any purpose subservient thereto". 9. The above observations clearly point out that if s. 5(k) applies to certain interest charges, the application of s. 5(e) would be automatically excluded. We are therefore unable to accept the contention that any amount not allowed under s. 5(k) should be considered under s. 5(e). We find from the statement filed by the learned Authorised Rep. that the major portion of the loan is only for agricultural purposes; such as weekly wages, sundry agricultural expenses etc., etc and these considered only under s. 5(k), we have now extracted a few items. S. No. Name Date Amount Purpose of borrowal (1) (2) (3) (4) (5) 1. M. Ramachandran 9-10-72 6,000 Funds diverted to business own by the brothers. 2. S. Ramasubramoniam 3-11-72 15,000 Tax payments of the partners 3. S.Kumaravelu Pillai 18-7-73 15,000 Diverted to business run by the partners 4. L. D. Jeevadhas 8-12-72 4,000 Provident fund contribution paid 5. S. Krishnam....
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....osition to pay the amount. Hence merely because the payment related to the treatment of the earlier year it cannot be disallowed. There is no dispute otherwise about the genuineness of the claim. We, therefore, direct that the entire sum of Rs. 62,688.20 must be allowed. (Relief Rs. 31,344). 12. Elephant chasing expenses: Rs. 3,251-- It is contended on behalf of the appellant that the expenditure claimed under this head is a regular head of incurred year after year for preventing wild animals from entering the fields and damaging the crops and the expenses were in the form of wages to watchmen. It is pointed out though the nomenclature is "elephant chasing" it is mainly to ward off any stray animals and is regularly paid to the watchers. The expenses incurred are towards wages Rs. 3,052,50, Gun-powder, batteries, drum etc., Rs. 198. In the earlier years this Tribunal has allowed a substantial portion of the same. Having regard to the facts and circumstances of the case we allow a round sum of Rs. 2,000. The disallowance is restricted to Rs. 1,251 (Relief Rs. 2,000) 13. Gratuity: The appellant claimed a sum of Rs. 1,43,758.50 under this head. The Agrl. ITO has allowed a sum of Rs.....
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....osed under a particular statute, which came to be passed in a particular year, the assessee should be in a position to claim the amount in respect of the earlier period of the service of the employees to whom the gratuity would have to be paid. In such a case a reserve is created to cover the earlier liability which was imposed by the statute, suddenly as it were, then to the extent of the reserve so created, on the basis of an actuarial valuation, there could be a claim for deduction by the assessee. The assessee would be faced with a liability to meet which it would have no funds. In such a case, an initial setting apart of the liability is possible and year after year the additional liability estimated actuarially could be added to the reserve and claimed as deduction. So far as the actual payments are concerned, they would not arise for consideration, as the actuarial liability is liable to be allowed year after year. The assessee cannot claim both the liability and the actual payment as acceptance of such a claim would involve double deduction. The ITO would be in a position to find out as to whether the assessee is making a double claim only in a case where the assessee maint....
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....as combined property till 30th April, 1977 and not in the course of carrying out the business. Hence on any account, the appellant is not entitled for a higher deduction. There is no case for any relief. 16. The next contention is about the additions of estimated yield of rubber. The addition made was Rs. 1,74,463-68. The ld. Authorised Representative submits that the yield had all along been accepted in the earlier years. It is further urged that the yield adopted for the year in the assessment of both the combined properties and the individual assessments far exceeded the average rate of yield admitted and accepted in the earlier years; that the trees in the estate were more than 40 years old; that they were long over due for slaughter tapping and as such the yield was less; that the expenditure under manure had gone down during the year and there was intensive tapping in the earlier years. The ld. State Representative submitted that though the trees were old the appellant incurred heavy expenditure under manure in all the earlier years which disproved that the trees were fit for slaughter tapping; that manuring would not show immediate improvement and that the benefit could be ....
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....s for 17.29 acres yield estimated at 20 quintals per acre would be 345.8 quintals only and not 386 quintals as mentioned in the assessment order. As regards rate adopted this is said to be very high as the rates are lower in producing centres. The ld. State Representative submitted that the rate adopted was the prevailing rate on the basis of an average figures taken in Kaynyakumari District. He therefore supported the additions. 21. We find that so far as paddy yield is concerned, there is some arithmetical mistake of nearly 40 quintals as pointed out on behalf of the appellant. We presume that no rectification has been made so far by the assessing authority. In that case, there is a prima facie case for relief of Rs. 4,520 (40x113). In the earlier order dt. 10th May, 1979, some reductions were made in round sums by this Tribunal. Having regard to the income determined earlier and also the fact that prices have gone up we reduce the addition under paddy by Rs. 7,000. This is inclusive of relief of Rs. 4520 mentioned earlier. But as regards cocoanuts, the estimate is found reasonable. No reduction is called for. The income of Nagamony Sastha & Bros. is reduced by Rs. 7,000. The pr....