THE COMMISSIONER OF AGRICULTURAL INCOME-TAX versus THE CALVARY MOUNT ESTATES (PRIVATE)

J.-This is an appeal by' special leave against the judgment and order of the High Court of

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J ' T R ' ' N 12 f 1957 >cera a m ax ev1s10n o. o ,

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d ,

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The respon ent who the assessee owned an estate of 590 acres in South M11labar district, now in Kerah Sta.te. Out of that area 85 acres were covered by Pepper, Arecanut, Paddy and Coconut cultivation while the rest i.e. 505 acres had rubber plantations upon it. Of that area 235 acres were occupied by immature non-bearing rubber trees and 270 acres had m11ture rubber trees. The assessment relates to the year 1955-56, the accounting year being the year ending March 31, 1955. The respondent claimed from out of the income expenses relating to the m11intenance and upkeep of immature non.bearing rubber trees. The Agricultural Income tax Tribunal held that the expenses incurred on the whole area under rubber plant11tions were deductible expenses and remanded the case for ascertaining the expenses incurred in forking and manuring of the "non-bearing and immature" rubber grown areas also. The appellant then preferred a revision application to the High Court under s. 54(1) of the Madras Plantn,tions Agricultural Income Tax Act, 1955 (Mad, V of 1955), The High Court held that the amount spent on the upkeep and maintenance of immature rubber trees was a deductible expenditure under s. 5(e) of that Act which provides:

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S, 5 "Computation of agricultural income: The agricultural income of a person shall be computed after making the following deductions, namely:-

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(e) any expenditure incurred in the previous year (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of the

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plantation;", The provisions of s, 5(e) of the Madras Act, applicable to the present case, are the same as those of s. 5(j) of the Trav'ancore Cochin Agricultural Income Tax Act (Act XXII of 1950). The only difference is in the last few words, In place of "for the purpose of the plantation" in the former, the words "for the purpose of deriving the agricultural income" are used in the latter. If anything the words of the former Act are more

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bl h d 1avoura e to t e respon ent. , .

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In Travancore Rubber and 'I ea Company Ltd. v. Commissioner of Agricultural Income Tax, Kerala ('), which was an assessment under the Travancore Cochin Act, we have decided the question of deductibility of sums expended for purposes of forking, manuring etc .. of immature rubber trees. That judgment will govern this case also. This appeal therefore fail.s and is dismissed wi~h costs in this courL and the High Court.

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Appeal dismissed RAJA BAHADUR VISHESHWARA SINGH AND OTHEHS.

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v. COMMISSIONER OE' INCOME-TAX, BIHAR

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AN'D ORISSA (J. L. KA!'UR, M. HIDAYATULLAH and J.C. SHAH, JJ.)

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Income Tax-l'urihase and sate of shares and scwrities with surplus tn.oney-Such if busi· ness in shares~Test-Excess sale proceeds-If business profit mere accretion capital-Indian Income-tax Act, of

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The appellant used to invest his cash surplus in shares and securities and maintained an account book called Book No. relating thereto. During the period from 1930 to 1941-42 he purchased a large number of shares and securities which by the accounting year 1941-42 were of a value Rs. 14·91 lacs. He sold certain shares and se<;urities of the value of several lacs and made certain amount of profit on those sales. In 1940 the appellant borrowed a large amount of money from his brother, the Maharaj a of Darbhanga and opened a new account named account No. \vhich contained all entries regarding shares purchased and sold out of the money borrowed from the Maharaja. In the assessment year 19-14-45 to 1948-49 the profits made by ti)e

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