TaxTMI 
TaxTMI 
1977 (11) TMI 49
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....ffee estates. The accounting year in question ended on March 31, 1971. The preliminary clearing of the land and planting with tea bushes was done in July, 1967, during the accounting period for the year ended October 31, 1967. The expenses for that year and for the subsequent year ended October 31, 1968, could have been considered for development allowance under section 33A(1)(a) of the Act in the second assessment year, i.e., 1969-70. In the succeeding two years, i.e., the third and fourth year of clearing and planting, the claim for development allowance would again come up for consideration. The statement of the case discloses that the relevant figures relating to the claim for development allowance are as follows: "1967 Tea clearing-Planting July, 1967 (13.63 Hectares) Rs. 1st year 1966-67 44,525 2nd year 1967-68 45,275 89,800 Less cost of clearing to be considered in the 4th year, i.e., A.Y. 71-72. 71,500 18,300 Rs. 50% thereof 9,150 Balance of expenses for which no claim was made 71,500 For the year 1971-72, the fourth year of 1967 clearing, the further expenses incurred ....
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....ed in section 33A(7). Under that provision, the entire four years' expenditure is totalled up to get at the actual cost. Actual cost till then is a notional figure representing the actual expenditure for a period of four years on the items mentioned in section 33A(7). This is reduced by the subsidies received from the Tea Board or other authority, either directly or indirectly, subject to a maximum of Rs. 10,000 per hectare for lands in hilly areas and Rs. 12,500 per hectare for lands in other areas. All the ingredients which enter into the "actual cost" of planting can be known only at the end of the fourth year. The Tribunal recognised that that was the reason why the computation is to be made in the fourth year. It noted that no provision had been made to recall the excess amount of the subsidies in cases where there was such excess; and was of the view that section 33A(1)(b) does not give a further opportunity to the assessee to get the allowance comprehended under section 33A(1)(a). In paragraph 13 of its judgment, the Tribunal noticed that the granting of the development allowance under section 33A(1)(a) was mandatory, if the necessary conditions had been established. The....
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....April, 1970. (2) Where the total income of the assessee assessable for the assessment year relevant to the previous year in respect of which the deduction is required to be allowed under sub-section (1) [the total income for this purpose being computed after deduction of the allowance under sub-section (1) or sub-section (1A) or clause (ii) of sub-section (2) of section 33, but without making any deduction, under sub-section (1) of this section or any deduction under Chapter VIA or section 280-O] is nil or is less than the full amount of the development allowance calculated at the rates and in the manner specified in sub-section (1)- (i) the sum to be allowed by way of development allowance for that assessment year under sub-section (1) shall be only such amount as is sufficient to reduce the said total income to nil ; and (ii) the amount of the development allowance, to the extent to which it has not been allowed as aforesaid, shall be carried forward to the following assessment year, and the development allowance to be allowed for the following assessment year shall be such amount as is sufficient to reduce the total income of the assessee assessable fo....
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....scribed. (4) If any such land is sold or otherwise transferred by the assessee to any person at any time before the expiry of eight years from the end of the previous year in which the deduction under sub-section (1) was allowed, any allowance under this section shall be deemed to have been wrongly made for the purposes of this Act, and the provisions of sub-section (5A) of section 155 shall apply accordingly : Provided that this sub-section shall not apply- (i) where the land is sold or otherwise transferred by the assessee to the Government, a local authority, a corporation established by a Central, State or Provincial Act, or a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956) ; or (ii) where the sale or transfer of the land is made in connection with the amalgamation or succession referred to in sub-section (5) or sub-section (6). (5) Where, in a scheme of amalgamation, the amalgamating company sells or otherwise transfers to the amalgamated company any land in respect of which development allowance has been allowed to the amalgamating company under sub-section (1),- (a) the amalgamated comp....
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....and topography, by general or special order, declare any areas to be hilly areas for the purposes of this section and such order shall not be questioned before any court of law or any other authority. Explanation.-For the purposes of this section, an assessee having a leasehold or other right of occupancy in any land shall be deemed to own such land and where the assessee transfers such right, he shall be deemed to have sold or otherwise transferred such land. " 6. From the section, it is clear that the development allowance is granted for the process of planting or replanting any land with tea bushes. The process is a continuous one, spread over a length of time, and involving alteration and readjustment of ideas and operations from time to time. The reckoning of the "actual cost" incurred for planting and replanting must, in the nature of things, await the finalisation of the plans and ideas and termination of the process of planting and replanting. It is only thereafter that an allowance can be given for "the actual cost of planting" as defined in section 33A(7): Any cost worked out till the final evolution of ideas and their execution must, in the nature of things, ....