M. S. MENON, J. - These references under section 60(1) of the Travancore-Cochin Agricultural Income-tax Act, 1950, raise a common question in I. T. R. Nos. 15 (assessment year : 1953-54), 18 (assessment year : 1951-52) and 19 (assessment year : 1952-53) is Travancore Rubber & Tea Company Ltd., Alleppey; and the assessee in I. T. R. No. 16 (assessment year : 1953-54) is the Murphy Estates Ltd., Pathirapally. In I. T. R. Nos. 15 and 16 the Appellate Tribunal (Sri Nandana Menon) rejected the contention of the assessees dismissed the appeals and in I. T. R. Nos. 11 and 19 the Appellate Tribunal (Sri Velu Pillai) accepted the contention of the assessee and allowed the appeals.
The question arising for decision is identically worded in all the four references, the only difference being as regards the accounting years and the amounts concerned. The question referred in I. T. R. No. 15 of 1955 reads as follows :
'Whether under the Travancore-Cochin Agricultural Income-tax Act, 1950, in calculating the assessable agricultural income of a rubber estate already planted and containing both mature yielding rubber trees and also immature rubber plants which have not come into bearing, the annual expenses incurred for the upkeep and maintenance of such rubber plants, are not a permissible deduction, and if so, whether the sum of Rs. 42,660-4-1 expended by the assessee in the relevant account year 1952, under this head, may be deducte ?'
Section 2(a) of the Travancore-Cochin Agricultural Income-tax Act, 1950, defines 'Agricultural income' -unless there is any thing repugnant in the subject or context - as meaning :
'(1) any rent or revenue derived from land which is used for agricultural purposes;
(2) any income derived from such land in the State by -
(i) agriculture, or
(ii) the performance by a cultivator or receive of rent-in-kind to render the produce raised or received by him fit to be taken to market, or
(iii) the sale by a cultivator or restive of rent-in-kind of the produce raised or received by him, in respect of which no process has been performed other than a process of the nature described in sub-clause (ii);
Explanation. - Agricultural income derived from such land by the cultivation of tea means that portion of the income derived from the cultivation, manufacture, and sale of tea as is defined to be agricultural income for the purposes of the enactments relating to Indian Income-tax;
(3) any income derived from any building owned and occupied by the receiver of rent-in-kind of any land with respect to which ore the produce of which any operation mentioned in sub-clauses (ii) and (iii) of clause (2) is carried on;
Provided that the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator or the receiver of the rent-in-kind by reason of his connection with the land, requires as a dwelling-house or as a store-house or other out-building';
and section 5 of the said enactment provides that 'the agricultural income of a person shall be computed after making the deductions' enumerated in clauses (a) to (n) of the said section.
The deduction admissible under section 5(j) is :
'any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly or exclusively for the purpose of deriving the agricultural income.'
We find it impossible to say that the amounts spent on the upkeep and maintenance of the immature rubber plants were laid out or expended 'for the purpose of deriving the agricultural income', much less that they were laid out or expended 'wholly or exclusively' for that purpose. 'The agricultural income', in the context, can only mean the agricultural income obtained in the accounting year concerned and not the agricultural income of any other period.
In Malankara Rubber Produce Co. Ltd. v. Commissioner of Agricultural Income-tax, a Division Bench of the Travancore-Cochin High Court had to deal with a claim for deduction under section 7(2) (c) of Act 1 of 1119 (Travancore) and section 14(3) (c) of Act XXII of 1121 (Travancore), namely :
'the expenses of cultivating the crop from which such agricultural income is derived, of transporting such crop to market, including the maintenance of agricultural implements and cattle required for the purpose of cultivation and for transporting the crop to market.'
The court observed that it found it impossible :
'... to include within the expression the expenses of cultivating the crop from which such agricultural income is derived the expenses incurred by the assessee on the maintenance of rubber plants which were immature and had not begun to yield. `Such agricultural income in the section must mean agricultural income from which the deduction is claimed and the expenses of cultivating the crop the expenditure on the mature rubber trees from which that income was earned'
dealt with the provisions of the Indian Income-tax Act and the decision of the Bombay High Court in In re Tata Iron and Steel Company Ltd. and said :
'The provision we have to deal with is entirely different. For a deduction to be permissible as far as agricultural income in this State is concerned it is not enough if the expenditure was not in the nature of capital expenditure and was in respect of the agricultural operations of the assessee during the accounting year. It must be far more intimately related - so related as to form a link in the chain of causation - to the crop that earned the profits or gains which form the basis of the assessment.'
Counsel for the assessees drew our attention to the deduction specified in section 5(n) (i) of the Act :
'(n) in the case of agricultural income referred to in sub-clause (2) of clause (a) of section 2 - (agricultural income from agriculture) -
(i) the expenses other than capital expenditure incurred in the previous year of cultivating the crop from which the agricultural income is derived and of transporting such crop to market, including the maintenance of agricultural implements and cattle required for such cultivation and transport or both'
and submitted that in view of this specific provision section 5(j) should be construed as having a wider ambit and that the expenses specified therein should not be confined solely to those which produced the agricultural income of the accounting period concerned in an assessment. We cannot agree. The fact that there is a provision like section 5(n) (i) is no reason to depart from the plain meaning of a provision like section 5(j) of the Act. We are also not impressed by the omission of the article 'the' before the words 'agricultural income', in section 5 (h) or (i).
One of the questions referred is whether section 5(j) should be deemed to be a residuary provision. A residuary provision normally winds up a section or an Act, as for example, section 10(2) (xv) of the Indian Income-tax Act, 1922 :
'any expenditure (not being an allowance of the nature described in any of the clauses (i) to (xiv) inclusive, and not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of such business, profession or vocation'.
We see no reason to hold that section 5(j) is a residuary provision as contended by the assessees.
No useful purpose will be served by discussing the decisions cited at the Bar - decisions rendered under taxing enactment the wording of which is different from that of the Travancore - Cochin Agricultural Income-tax Act, 1950; decisions like Vallambrosa Rubber Co. Ltd. v. Farmer (Surveyor of Taxes), and they are not dealt with in this judgment.
In the light of what is stated above we must hold that the contentions of the assesses are unsustainable, that the deduction claimed is not a permissible deduction under section 5(j) of the Travancore-Cochin Agricultural Income-tax Act, 1950, and answer the question referred in I. T. R. No. 15 and I. T. R. No. 16 of 1955 and the first of the two questions referred in I. T. R. No. 18 and I. T. R. No. 19 of 1955 accordingly. We also answer the second of the two questions referred in I. T. R. No. 18 and I. T. R. No. 19 of 1955 in the negative.
A copy of this judgment will be sent under the seal of the court and the signature of the Registrar to the Appellate Tribunal as provided by sub-section (6) of section 60 of the Act.
References answered accordingly.