Law: Income Tax Rules, 1962

Section: 7,7(2)(a),7(b)

(a) Income-tax----Agricultural income---Business---Composite income from business and agriculture---Determination of income exempt from income-tax---Sugar manufacturer---Rule 7(2)(a) is applicable---Price of sugarcane grown by assessee in its own fields and used for manufacture of sugar to be determined in accordance with R. 7(2)(a)---Indian Income Tax Rules, 1962, R.7(2)(a), (b). The assessee, a manufacturer of sugar, claimed deduction of expenses under rule 7(2)(b) of the Income-tax Rules, 1962, in computing its "agricultural income" from sugarcane grown by it in its fields and also depreciation on its farm assets. The claims were disallowed by the Appellate Tribunal. On a reference: Tribunal was correct in holding that while computing the income chargeable to income-tax under the head "Profits and gains of business", the deduction should be made in accordance with the provisions of rule 7(2)(a) of the Income-tax Rules, 1962. Thiru Arooran Sugars Ltd. v. CIT (1997) 227 ITR 432 (SC) fol. (b) Income-tax --- ----Depreciation---Assessee is not entitled to claim depreciation on farm assets used for earning agricultural income---Indian Income tax Act, '1961, S.32. Claim of the assessee for depreciation on its farm assets should fail because of the provisions contained in section 32 of the Income-tax Act and it was not necessary even to invoke rule 7 of the Income-tax Rules, 1962, to deny the claim of the assessee for depreciation. CIT v. Thiru Arooran Sugars Ltd. (1983) 144 ITR 4 (Mad.) ref. JUDGMENT N.V. BALASUBRAMANIAN, J.---The following two common questions of law have been referred to us for our consideration in respect of the assessment years 1974-75, 1975-76 and 1978-79: "(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that in computing the income chargeable to income-tax under the head 'Profits and gains of business' the deduction to be made to exclude the agricultural portion of the appellant's income should be worked out in accordance with rule 7(2)(a) and not rule 7(2)(b) of the Income-tax Rules, 1962? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492