THE THAMARAPALLY RUBBER CO.LTD. V. THE JT.COMMISSIONER OF INCOMETAX

OP/22465/1999

AI Insights

The case involves The Thamarapally Rubber Co. Ltd., which challenged the assessments made by the Income Tax Authorities under the Income Tax Act, 1961, for income derived from centrifuging of Rubber Latex, which was already assessed under the Agricultural Income Tax Act. The petitioner argued that the same income should not be subjected to double taxation. The court examined the rules regarding the bifurcation of income for tax purposes and the applicability of the Central Board's clarification issued in 2001, which stated that income already taxed under the Agricultural Income Tax Act should be excluded from income tax. The court's decision primarily focused on preventing double taxation and ensuring that the income was taxed only once under the appropriate tax regime.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 738239 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 15-09-2010
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Agricultural Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P K MENON; JOESEPH JOSEPH; GEORGE GEORGE
• Assessee Lawyers: JOSEPH MARKOSE; THOMAS VELLAPPALLY
• Keywords: Agricultural income-tax; Assessment; Bifurcation of income; Income Tax; Centrifuging of Rubber Latex
• Section: 147; 148; 143(3); 153A; 68

Judgement Text

" 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, KOTTAYAM REPRESENTED 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. 2. INSPECTING ASSISTANT COMMISSIONER (SPL.) AGRICULTURAL INCOME TAX, ERNAKULAM. 3. THE DEPUTY COMMISSIONER (APPEALS), AGRICULTURAL INCOME TAX, ERNAKULAM. 4. THE UNION OF INDIA, REPRESENTED BY SECRETARY TO REVENUE DEPARTMENT, MINISTRY OF FINANCE, NEW DELHI-110001. 5. COMMISSIONER OF INCOME TAX (APPEALS), COCHIN. 6. THE STATE 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.GEORGE GOVT. 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 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 15th day of September, 2010 J U D G M E N T ---------------------- Exts.P2 & P3 assessments completed under the Income Tax Act, 1961, in respect of income derived by the petitioner from centrifuging of Rubber Latex for the year 1996-97, is under challenge. According to the petitioner, the same income was assessed under the Agricultural Income Tax Act, as evidenced from Ext.P1 and hence the assessment is unsustainable. 2. The Income Tax Authorities have assessed the income derived from centrifuging of Rubber Latex, treating the same as an industrial activity. But as per the Rule introduced, bifurcating of income derived from centrifuging of Rubber Latex, for assessment under the Agricultural Income Tax Act and the Income Tax Act is necessary. The assessments need be completed in accordance with such bifurcation. But with respect to the periods prior to amendment of the Rule, a clarification was issued by the O.P.22465/99-Y -2- Central Board in the year 2001, wherein it is stated that those assessees who have filed returns and paid tax under the AIT Act shall be excluded from payment of income tax. 3. Since the petitioner had already paid Agricultural Income 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 Tax Authorities can proceed with the assessment of other income which is liable to be taxed under Income Tax Act, 1961. Writ petition is allowed to the above extent. C.K.ABDUL REHIM, JUDGE. okb "