Op/22465/1999 Of The Thamarapally Rubber Co.ltd v. The Jt.commissioner Of Incometax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 15TH SEPTEMBER 2010 / 24TH BHADRA 1932 OP.No. 22465 of 1999(Y) ----------------------- PETITIONER: ------------------ THE THAMARAPALLY RUBBER CO. LTD.,ANCHERIL BANK BUILDING, KOTTAYAMREPRESENTED BY ITS DIRECTOR,SRI.G.J.ANCHERIL. BY ADV. SRI.JOSEPH MARKOSE, SENIOR ADVOCATE SRI.THOMAS VELLAPPALLY RESPONDENTS: --------------------- 1. JOINT COMMISSIONER OF INCOME TAX (ASSESSMENT), SPECIAL RANGE, KOTTAYAM. SPECIAL RANGE, KOTTAYAM. 2. INSPECTING ASSISTANT COMMISSIONER (SPL.) AGRICULTURAL INCOME TAX, ERNAKULAM. AGRICULTURAL INCOME TAX, ERNAKULAM. 3. THE DEPUTY COMMISSIONER (APPEALS),AGRICULTURAL INCOME TAX, ERNAKULAM.AGRICULTURAL INCOME TAX, ERNAKULAM. 4. THE UNION OF INDIA,REPRESENTED BY SECRETARY TO REVENUE DEPARTMENT,MINISTRY OF FINANCE, NEW DELHI-110001.REPRESENTED BY SECRETARY TO REVENUE DEPARTMENT,MINISTRY OF FINANCE, NEW DELHI-110001. 5. COMMISSIONER OF INCOME TAX (APPEALS),COCHIN.COCHIN. 6. THE STATE OF KERALA,REPRESENTED BY THE CHIEF SECRETARY TO THE GOVERNMENT OF KERALA.REPRESENTED BY THE CHIEF SECRETARY TO THE GOVERNMENT OF KERALA. SENIOR ADV. SRI.P.K.RAVINDRANATHA MENON FOR R1,4 & 5 SRI. JOSE JOSEPH, STANDING COUNSEL ADV.GEORGE K.GEORGEGOVT. PLEADER FOR R2 , 3 &6 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 15/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: O.P.22465/1999 APPENDIX PETITIONER'S EXHIBITS:- EXT.P1:- TRUE COPY OF ORDER DT.18.12.1998 PASSED BY THE R2 EXT.P2:- TRUE COPY OF ASSESSMENT ORDER DT.3.2.1999 PASSED BY THE R1 EXT.P3:- TRUE COPY OF ORDER DT. 15.3.1999 PASSED BY THE R1 EXT.P4:- TRUE COPY OF ORDER IN CMP.33773/99 IN O.P.20415/99 OF THIS COURT DT.10.8.1999 COURT DT.10.8.1999 RESPONDENT'S EXHIBITS:- NIL OKB //TRUE COPY//P.A. TO JUDGE C.K.ABDUL REHIM, J. ---------------------------------- O.P.No.22465 of 1999 ---------------------------------- Dated this the 15[th] day of September, 2010 J U D G M E N T---------------------- Exts.P2 & P3 assessments completed under theIncome Tax Act, 1961, in respect of income derived by thepetitioner from centrifuging of Rubber Latex for the year1996-97, is under challenge. According to the petitioner, thesame income was assessed under the Agricultural IncomeTax Act, as evidenced from Ext.P1 and hence the assessmentis unsustainable. 2.The Income Tax Authorities have assessed theincome derived from centrifuging of Rubber Latex, treatingthe same as an industrial activity. But as per the Ruleintroduced, bifurcating of income derived from centrifugingof Rubber Latex, for assessment under the AgriculturalIncome Tax Act and the Income Tax Act is necessary. Theassessments need be completed in accordance with suchbifurcation. But with respect to the periods prior toamendment of the Rule, a clarification was issued by the Central Board in the year 2001, wherein it is stated that thoseassessees who have filed returns and paid tax under the AIT Actshall be excluded from payment of income tax. 3.Since the petitioner had already paid AgriculturalIncome Tax on the full income derived from centrifuging of latex,the said income is not assessable for the purpose of income tax.Therefore the impugned orders of assessments under Exts.P2 &P3 are hereby quashed. 4.However, it is made clear that the Income TaxAuthorities can proceed with the assessment of other incomewhich is liable to be taxed under Income Tax Act, 1961. Writ petition is allowed to the above extent. C.K.ABDUL REHIM, JUDGE. okb