2004 (7) TMI 81

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e Assam Agricultural Income-tax Act, 1939. Therefore, it can be deducted only to the proportion of the agricultural income. He relies on a decision in Jorehaut Group Ltd. v. Agricultural Income-tax Officer [1997] 226 ITR 622 (Gauhati), wherein the cess paid was allowed to be deducted against 60 per cent, of the agricultural income before apportionment under rule 8. But we find from the said decision that the said decision does not support the contention raised by learned counsel for the appellant that only 60 per cent, of the cess is payable. In the said decision in Jorehaut Group ltd. [1997] 226 ITR 622 (Gauhati), it was held that the amount of cess paid is deductible after apportionment from 60 per cent, of the income computed under the I....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....i Tea Estates Ltd. v. State of Kerala [1963] 48 ITR (SC) 83; Anglo-American Direct Tea Trading Co. Ltd. v. CA1T [1968] 69 ITR 667 (SC); Tata Tea Ltd. v. State of West Bengal [1988] 173 ITR 18 (SC); Mcleod Russel (India) Ltd. v. State of West Bengal [1988] 173 ITR 18 (SC), wherein the concept of agricultural income provided in section 2(1A) of the Income-tax Act and its interpretation with reference to rule 8 of the Income-tax Rules, 1962, read with section 295 of the Income-tax Act, was explained and clarified and that the judgment of the Guwahati High Court is contrary to the principle propounded in the said judgments of the Supreme Court. Whereas the learned Tribunal had found that the cess came up for consideration before the Tribunal in....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e agricultural income. But when by fiction in respect of tea grown and manufactured, the agricultural component of the income out of the tea grown is also computed under the Income-tax Act along with the income out of the tea manufactured from the tea grown. When by fiction the income as computed as an income under the Act, all deductions as are available both for the agricultural component and for the business component of the income are to be allowed as a natural corollary to the fiction so created. Such deductions, which are allowed in order to arrive at the total income exigible to tax, are to be allowed and the apportionment of the total income so computed is to be made. If the agricultural part of the deductions is made applicable for....