Commissioner of Agricultural Income Tax, Madras vs Chencand Estate

Ramaprasada Rao, J.—A short but an interesting question arises in this tax case. The Tribunal was asked not to allow an expediter

amounting to Rs. 1,005 which, admittedly, was incurred by the assessee for supplying vacancies in the re-planted area. What apparently was

contended for was, that in a re-planted area, if plants dry up and in the place of such dried up plants fresh plants are supplanted and expenditure in

incurred for the purpose, whether it would be an expense ""incurred in the previous year"" of cultivating the crop for the purpose of re-planting. The

case of the assessee was that during the previous year in question this expenditure was incurred solely to fill up gaps in the area which was already

the subject of re-plantation in the previous year and the necessary expenditure incurred therefore. But the revenues contention was that even such

expenses incurred would really amount to expenses for replanting within the meaning of the first proviso to section 5(g) of the Madras Agricultural

Income Tax Act, 1955. The Tribunal was of the view that the expenditure cannot be characterised as re-planting expenditure. As against this the

present tax case had been filed.

""Re-planting expenditure"" which occurs in section 5(g) of the Act has a special significance in agricultural operation. Further, the first proviso to

section 5(g) throws light on this, because the expenditure is related to the acreage in which re-planting is effected. If, therefore, the legislature

contemplated an exemption from agricultural Income Tax regarding a portion of such re-planting expenditure, with reference to the acreage of

operation, then it necessarily follows that in the case of filing up dried up plants in the course of such re-planting, the expenditure cannot come

within the purview of the proviso to section 5(g). If, for example, in the re-planted area couple of trees are dried up and they are replaced by filling

up the vacancies therein, then it would be highly impracticable to judge such expenses with reference to the area of operation. As this yardstick

prescribed in the proviso cannot be invoked in a case where plants are re-planted in the vacancies or the gaps created, after re-plantation, then

such an expenditure incurred would necessarily fall u/s 5(e) of the Act and not within the meaning of the proviso to section 5(g) of the Act. It is,

therefore, easy to comprehend that if in a re-planted area certain plants are dried up, which involves in consequence the filling up of the vacancies

created by such plants, an expenditure incurred wholly and exclusively for the purpose of the land. The Tribunal was of the view that all such

expenditure would not come within the meaning of section 5(g) of the Act. In our view, the Tribunal is right.

No other question of law arises in the order of the Tribunal and this tax case is therefore, dismissed.