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1994 DIGILAW 950 (MAD)

Barwood Estate v. State of Tamil Nadu

1994-11-15

JAYASIMHA BABU, THANIKKACHALAM

body1994
Judgment :- THANIKKACHALAM J. The assessee is the petitioner herein. Messrs. Barwood Estate Plantations Private Limited is one of the constituents of Barwood Estate which carries on the business of plantation with a common management with regard to the lands belonging to (1) Hariprasad, Coonoor, (2)Messrs. Gudalur Industrial and Agricultural Enterprises, Gudalur, and (3) Messrs. Barwood Plantations Private Limited, Gudalur. The Agricultural Income-tax Officer has computed the total income of the Barwood Estate and allocated them in the ratio of the shares in the Barwood Estate. The shares allocated to Barwood Plantations Private Limited has been assessed by the Agricultural Income-tax Officer at the appropriate rate of 65 per cent. It is the contention of the assessee in Barwood Estate that the status of association of individuals is wrong and status of tenants-incommon only should apply. When co-owners of land run the estate with a common unit of management and derive income, it becomes an assessable entity since there is volition among the parties to join together and derive income by common enterprises. Therefore, the Agricultural Income-tax Officer came to the conclusion that the assessee should be assessed as association of individuals. On appeal, the Appellate Assistant Commissioner confirmed the order passed by the Agricultural Income-tax Officer in determining the status of the assessee as association of individuals. On further appeal, the Appellate Tribunal confirmed the order passed by the Appellate Assistant Commissioner in the matter of confirming the status of the assessee as that of association of individuals Before us, learned counsel for the assessee submitted that the assessee should be assessed as co-owners by treating them as tenants-in-common. A similar issue came up for consideration before this court in the case of the same assessee in State of Tamil Nadu represented by Commissioner of Agricultural Income-tax v. Tvl. Barwood Estate (order dated September 11, 1991, in Tax Case No. 427 of 1979), wherein this court held that all the assessees will have to be assessed as co-sharers. In view of the abovesaid order of this court, rendered in the case of the same assessee for the earlier assessment year, we also hold that the constituents of the assessee should be assessed as co-sharers instead of association of individualsThe next point in this revision relates to the claim of depreciation of Rs. 4, 250. In view of the abovesaid order of this court, rendered in the case of the same assessee for the earlier assessment year, we also hold that the constituents of the assessee should be assessed as co-sharers instead of association of individualsThe next point in this revision relates to the claim of depreciation of Rs. 4, 250. According to the Agricultural Income-tax Officer, it relates to initial depreciation, which is not allowable under the Rules. Hence, it was disallowed. On appeal, the Appellate Assistant Commissioner confirmed the order passed by the Agricultural Income-tax Officer. So also on further appeal, the Tribunal confirmed the order passed by the Appellate Assistant Commissioner. Learned counsel for the assessee submitted that the authorities below were not correct in disallowing the additional depreciation, as claimed by the assessee Learned Additional Government Pleader (Taxes) submitted that in view of the fact that rule 4(2) of the Tamil Nadu Agricultural Income-tax Rules allowed initial depreciation up to the end of 1959, the assessee is not entitled to deduction of initial depreciation. Both the Income-tax Officer as well as the Appellate Assistant Commissioner, characterised the depreciation claimed by the assessee as initial depreciation. Since the depreciation claimed was initial depreciation, in view of the fact that rule 4(2) of the Tamil Nadu Agricultural Income-tax Rules allowed initial depreciation up to the end of 1959, for the assessment year under consideration, it is not possible for the assessee to claim initial depreciation. Further, learned counsel for the assessee submitted that time should be granted to verify what is the nature of depreciation claimed by the assessee before the assessing authority. We consider that such request cannot be acceded to, because the Income-tax Officer as well as the Appellate As sistant Commissioner proceeded on the basis that the depreciation claimed by the assessee was initial depreciation. While so, this court cannot take a view other than what has taken by the authorities below, in so far as the nature of depreciation claimed by the assessee is concerned. Accordingly, the revision is allowed in part. No costs.