GROVER, - (1.) THE Judgment of the court was delivered by
(2.) THESE appeals by special leave arise out of a commor judgment of the Allahabad High court in two references made under the United Provinces Agricultural Income-tax Act, 1948 (hereinafter called the Act). As the points are common the facts in appeal No. 1276 of 1966 may be briefly stated. The appellant is a sugar factory to which is attached a sugarcan farm. The appellant carries on agricultural farming on a large scale is District Deoria and had several farms. According to the case of the appellan it engages on each farm a Manager with necessary technical, clerical and menial staff to assist him. These persons are also provided accommodati and facilities for medical treatment and are given certain other necessary allowances. It is claimed that the whole establishment is maintained excla cively for the purposes of the farm. 154
(3.) THE appellant opted to be assessed under Section 6(2)(&) of the Act for the assessment year 1357-F, the Assessing Income-tax Officer (Collector) assessed the appellant to Agricultural Income-Tax after disallowing expenses on the management charges of European Establishment etc., miscellaneous expenses, salary of European staff, rent, inspection, repairs of bungalows and offices as not being admissible under the rules. This Order was upheld by the Agricultural Income-Tax Commissioner mainly on the ground that the number of persons employed and their salary was not given and it was therefore not possible "to determine whether those persons were at all necessary when the assessee had too many other servants or labourers or the like". He disallowed the expenses on management and establishment and on the subscription on periodicals, on postage and telegram, printing and stationery, medicine etc. In his opinion these could not be regarded as costs of cultivation. A revision was filed before the Agricultural Income-Tax Board which was dismissed on the ground that the aforesaid expenses could not strictly be called expenses of cultivation and were not permissible under Section 6(2) (b) (iv) of the Act. THE appellant filed an application under Section 24(2) for reference to the High court. THE Agricultural Income-Tax Board stated the following question of law : ' "Whether the amount claimed by the assessee as expenses of management, miscellaneous expenses, detailed above can be allowed as expenses of cultivation under Section 6(2)(&)(ir) of the Act ?". The items which had been disallowed and with regard to which the reference was made are given below : JUDGEMENT_152_2_1970Html1.htm ;