Bhavani Tea And Produce Company … vs State Of Kerala on 26 May, 2008

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

OTC.No. 9 of 2006()


1. BHAVANI TEA AND PRODUCE COMPANY LTD.,
                      ...  Petitioner

                        Vs



1. STATE OF KERALA, REPRESENTED BY THE
                       ...       Respondent

                For Petitioner  :SRI.RAMESH CHERIAN JOHN

                For Respondent  : No Appearance

The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice V.K.MOHANAN

 Dated :26/05/2008

 O R D E R
                       C.N.RAMACHANDRAN NAIR &
                                  V.K.MOHANAN, JJ.
                  ....................................................................
                                  O.T.C. No.9 of 2006
                  ....................................................................
                    Dated this the 26th day of May, 2008.

                                         JUDGMENT

Ramachandran Nair, J.

This O.T.C. is filed against the order of the Tribunal confirming first

appellate authority’s order pertaining to allocation of overhead expenditure.

We have heard counsel for the petitioner and Government Pleader. On

going through the Tribunal’s order we find that the petitioner’s apprehension

is out of place because the Tribunal has only upheld in principle the

allocation of overhead expenditure in proportion to direct expenditure. The

petitioner’s case is that if re-allocation is made, original allocation made by

the petitioner based on cultivated area and accepted in Central Income tax

assessment has to be varied which is not possible because of the finality

achieved to the assessment order passed by the Central Income Tax Officer

in respect of tea income. We find the Tribunal has specifically stated that

the Central Income Tax assessment order on tea income should not be

disturbed. The disallowance of overhead expenditure to the extent

permissible under the Agricultural Income Tax Act is not going to affect the

Central Income Tax assessment order. In fact if additional disallowance in

2

the AIT assessment leads to an inadequate claim made and allowed in the

Central Income tax assessment, probably petitioner can file a belated appeal

against the Central Income Tax assessment. However, so long as

computation of tea income by the Central Income Tax authorities is adopted

by the Agricultural Income Tax Officer under Section 39 of the A.I.T. Act,

we find the matter stands remanded by the Tribunal after holding that in

principle the allocation of overhead expenditure in proportion to direct

expenditure is quite justified. We find no justification to deviate from

decision of the Tribunal in principle. Since the matter only stands

remanded for the Assessing Officer to pass orders, we find no ground to

interfere with the order of the Tribunal and therefore, dismiss the O.T.C.

C.N.RAMACHANDRAN NAIR
Judge

V.K.MOHANAN
Judge
pms