The Commissioner of Agricultural Income Tax, Madras vs M/s. Ochterlary Valley Estates, (1930) Ltd. Nilgiris

Ramanujam, J.—The case arises under the Madras Agricultural Income tax Act. The assessee in this case was assessed under the said Act

for the assessment year 1966-67 and its income for the assessment year was determined at Rs. 11,61,925,78, which was set off against losses of

the earlier years. In determining the said income, the Agricultural Income tax Officer disallowed certain items. In this case, we are concerned only

with two items, viz. (i) staff and labour bonus to the extent of Rs. 1,25,000 and (ii) the deduction claimed by the assessee under S. 80-E of the

Central Incometax Act. The disallowance was questioned by the assessee by filing an appeal before the Tribunal the Tribunal upheld the

assessee''s claim. The Revenue questions the correctness of the view taken by the Tribunal in this revision. The assessee, for the period ended 31st

March 1966, created a provision for payment of bonus to the staff and labourers, relevant to the assessment year, of an amount of Rs. 1,25,000.

During the year they paid a bonus of Rs. 1,04,939-87 to the employees for the year 1964. The entire claim of Rs. 1,25,000, was disallowed by

the assessing authority on the ground that the expenditure had not actually been incurred by the assessee in connection with the business in the

relevant accounting year. But, it is not in dispute that the provision for payment of bonus was made during the year though it was actually disbursed

later. The Tribunal went into the question as to whether the amount set apart for payment of bonus is, in any way, inflated and ultimately said: ""We

have no suspicion that the provision made during the year is, in any way, inflated, and it is also clear that it pertains to the bonus payable to the staff

and labour pertaining to the relevant accounting year."" In view of this finding, the Tribunal upheld the claim of the assessee. We see no justification

to differ from the view taken by the Tribunal in this regard. The Tribunal specifically finds that the entire amount has been set apart and provided

for payment of the bonus to the staff and labour in relation to the relevant accounting year. The learned counsel for the Revenue would, however,

put forward a further contention before us, which was not however, urged before the Tribunal. It is contended that when there is a specific

provision in S. 5(1)giving allowance for bonus paid to the workers, the bonus paid to the staff which will not come under S. 5(1) cannot be

brought under the residuary provision in S. 5(e). But, a similar contention has been negatived by this court in State of Madras v. Glenburgh Estates,

Coonoor 1960-2 M.L.J. 211 and State of Madras v. Balmadies Plantations Ltd. 1960-2 M.L.J. 499 in view of these decisions, the contention

that S. 5(e) cannot be invoked in respect of bonus paid to the staff cannot be accepted. The next item in dispute relates to the allowance in relation

to the deduction claimed under S. 80-E of the Central Income tax Act. The tribunal has held that the assessee is entitled to the benefits of the said

provision in S. 80-E even in respect of proceedings for assessment under the Madras Agricultural Income tax Act. The view taken by the tribunal

is in accord with the view taken by this court on the point in Commissioner of Agricultural Income Tax and Another Vs. Periakaramalai Tea and

Produce Co. Ltd. and Others,

In view of that decision, the Tribunal''s view cannot be taken exception to. The result is the tax case is dismissed with costs. Pleader''s fee: Rs.

150.