- (1.) The High court of Kerala answered in the affirmative, that is, in favour of the Revenue and against the assessee, the following question : "Whether on the facts and in the circumstances of the case, the tribunal was right in law in holding that the fee paid to the auditors has been correctly disallowed in computing the agricultural income of the appellant for the assessment year 1972-73 -
(2.) The short question before the High court was whether the amounts expended by the assessee, who is in appeal before us, by way of charges paid to his auditors for the purposes of preparing his returns of income under the Agricultural Income Tax Act, 1950 were allowable expenditure under Section 5 (i) thereof. Thereunder, a deduction could be allowed in respect of "any expenditure laid out or expended wholly and exclusively for the purposes of deriving the agricultural income". The High court, basing itself on its earlier judgment in commissioner OF INCOME TAX v. Nilambur Rubber Co. Ltd. held that only amounts expended in connection with the raising and processing of crops, rendering them in a condition to be taken to the market and transportation charges could legitimately fall within the scope of the said Section 5 (i).
(3.) It was brought to our notice by learned counsel for the appellant that a full bench of the Kerala High court had, in Plantation Corpn. of Kerala Ltd. v. Commissioner of Agricultural Income Tax considered the earlier judgment in Nilambur Rubber Co. Ltd. and held that the interpretation put upon Section 10 (2 (xv) of the Indian Income Tax Act, 1922 and upon Section 37 (1 of the Income Tax Act, 1961 by this court in Travancore Rubber and Tea Co. Ltd. v. Commissioner of Agricultural Income Tax, Kerala and State of Madras v. G. J. Coelho would be as applicable to the said Section 5 (j). Section 5 (j) is, therefore, wide enough to cover the fee paid by the assessee to his auditors for preparing returns under the said Act. We must note that learned counsel for the Revenue stated that a special leave petition against the full bench judgment was pending.;