2000 (5) TMI 33

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....ther the Board, in deciding the appeal, was right in relying solely on the provisions of section 8(2)((f)(vii) of the Assam Agricultural Income-tax Act, 1939, as it stood prior to its amendment by the Assam Agricultural Income-tax (Third Amendment) Act, 1989, without considering the implication of the second proviso to section 8(2) of the said Act and the provisions of rule 5 of the Assam Agricultural Income-tax Rules, 1939 ? (ii) Whether the Board was right in holding that the assessing authorities under the Assam Agricultural Income-tax Act have to accept the same computation without any discretion to apply on their own as to the amount of expenses disallowed in computing 100 per cent. of composite income from cultivation, manufacture ....

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.... Ltd. engaged in cultivation, manufacture and sale of tea having its business in the State of Assam is an assessee under the Assam Agricultural Income-tax Act of 1939. The dispute relates to the assessment years 1981-82 and 1982-83. The appellant submitted returns of the agricultural income claiming, inter alia, deduction under the head (i) entertainment expenses, (ii) share issue expenses, (iii) commission and bonuses, (iv) salary and perquisites, etc. After completion of the assessment, the Agricultural Income-tax Officer disallowed the claim of deduction, against which appeals were filed before the Assistant Commissioner of Taxes (Appeals), Guwahati, claiming deduction of expenses under section 8(2)(f)(vii) of the Act. The Assistant Comm....

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....tural activities. For instance, an employee may be engaged in cultivation of tea as well as for sale of tea. In such cases, it will not be possible to ascertain the actual expenditure in agricultural activities. We do not agree with the submission of Dr. Todi that actual expenditure made for the purpose of cultivation of tea should be found out and be taken as expenditure to derive income from agriculture. We also find it difficult to accept the submission of Mr. Gogoi that a notional percentage of expenses should be taken out for the purpose of giving allowance to the extent of 60 per cent. in the manner prescribed for the purpose of determining the income. The Legislature thought it fit to prescribe the percentage for determining the inco....