TaxTMI 
TaxTMI 
2012 (9) TMI 748
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted from assessee's own plantation, the assessee is also buying latex from small planters convert into centrifuged latex and sell the same. Following the practice for several years, for the assessment year 1996-97 also, the assessee returned 100% of income from their plantation obtained on sale after conversion of field latex into centrifuged latex for assessment under the Kerala Agricultural Income Tax Act and no part was offered for assessment under the Central Income Tax Act. So far as the payment of agricultural income tax is concerned, assessment was completed based on the income returned and the order has become final. Even though no income from sale of centrifuged latex obtained by conversion of field latex from assessee's own planta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cts. 2. At the request of the assessee, the Writ Petition filed was ordered to be posted along with the Income Tax Appeal and we have heard both the cases together. We have heard learned counsel for the assessee, learned Senior Standing Counsel for the Revenue and also learned Government Pleader for the State. 3. Before proceeding to consider the grounds raised and the relief sought by the assessee in the Income Tax Appeal as well as in the Writ Petition, we have to consider the development of the law on the subject. Even though Rule 7 of the Rules, which provides for assessment of income obtained partly as agricultural income and partly as business, was in force from 1962 onwards, the rubber plantation companies in the State engaged ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... cost, no deduction shall be made in respect of the amount of any subsidy which, under the provisions of clause (31) of section 10, is not includible in the total income." 4. It may be noticed that Rule 7A is not given any retrospective effect. However, it so happened that even during the period Rule 7A was in contemplation, some of the Assessing Officers started assessing part of the income from sale of centrifuged latex under the Central Income Tax Act by applying Rule 7. Further, after the introduction of Rule 7A, assessments already completed in the case of some assessees were reopened and revised by the Assessing Officers under Section 147 of the Income Tax Act and by the Commissioners of Income Tax under Section 263 of the Income T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vised under Section 147 or under Section 263 but a scrutiny assessment under Section 143(3) of the Act. 6. Before us learned counsel for the assessee submitted that the circular should be understood to mean exemption from central income tax on part of the business income from centrifuged latex to all assessees assessable under the Agricultural Income Tax Act for any period prior to the assessment year 2002-03. According to the learned counsel, it makes no difference whether the assessment is made by the Central Income Tax Department by way of reassessment under Section 147 or based on orders under Section 263 or whether it be a regular assessment under Section 143(3) of the Act. Learned Standing Counsel for the Revenue on the other hand ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the circular. However, in cases where the Assessing Officers delayed assessments under the Central Act, they are free to make regular assessment under Section 143(3) of the Act on part of the business income from sale of centrifuged latex. In other words, in case of delay in completion of regular assessment by the Assessing Officers, assessments and demand could be made for any assessment year prior to 2002-03 whereas for assessments completed promptly upto the assessment year 2002-03 the Department is not entitled to make revision of assessment under Section 147 or Section 263 of the Act by virtue of the circular above referred. In our view, there is no distinction between the same class of assessees, who have returned and paid tax on ....