Law:

Section:

Tax Cases Nos. 1295 to 1299 of 1990 and 696 of 1993, decided on 14-11-1997. Tamil Nadu Agricultural Income Tax Act 1955 - Sections 2(nn), 35 - Re- assessment- Deductions and depreciation not allowed- Validity - Assessee derived income from plantation of rubber, coconuts, cloves, etc. - Running medical centre for treatment of staff and maintaining a car for supervision of medical centre - Assessing officer re-opened assessment after disposal of appeal by AAC. on ground that yield of latex in respect of rubber trees sold by assessee for the year 1985-86 was not taken into consideration in earlier assessment- Challenge to - Re-opening of assessment - Justification of - Subsidy from Rubber Board - Assessibility of tax - Question of - Entitlement to deduction and depreciation - Scope and extent - Income of latex yield from rubber trees escaping taxation at time of original assessment - Re-opening of assessment by Assessing Officer - Whether same subject matter which had finally been disposed of by A.A. C. - Held no - Whether subsidy received from Rubber Board could be considered as revenue receipt- Held no - Whether in absence of any details regarding proportion or number of outsiders, availing benefit of medical centre, in addition to or alongwlth agricultural workers, 50% of amount claimed for deduction as well as for depreciation had to be allowed - Held yes Division Bench of this court in Velimalai Rubber Co. Ltd. v. Agrl. ITO [1991] 188 ITR 262 has held that the subsidy received from the Rubber Board under the Replanting Subsidy Scheme could not be considered as revenue receipt and consequently could not be subjected to tax. This sort of a view has also been followed by this court in many a decision subsequently rendered. Consequently, the finding relatable to the treatment of the rubber subsidy as revenue receipt and, therefore, exigible to tax, deserves to be set aside and the assessee has to be necessarily given the benefit of exemption from taxation, treating such receipt as capital, receipt. In the absence of any details regarding the proportion or the number of outsiders, who have also availed themselves of the benefits of the medical centre, in addition…

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