COMMISSIONER OF AGRICULTURAL INCOME TAX Vs. RUBBER BOARD

JUDGEMENT

(1.) These three agricultural income tax referred cases arise for the assessment years 1977-78, 78-79 and 79-80. Common question referred for the above three years is as follows:

(2.) The assessee is the Rubber Board, Kottayam constituted under S.4 of the Rubber Act, 1947. It is functioning as a statutory body under the administrative control of the Ministry of Commerce, Government of India. The Board is working for the development of rubber and rubber Industry in the country as provided under the provisions of the Rubber Act, 1947 (Act No. XXIV of 1947). Admittedly, the Board is mainly holding research institutions and for the said purpose, rubber estates are maintained. The Board derives income, inter alia, from sale of planting materials and rubber.

(3.) For the assessment years in question, the assessee claimed exemption in respect of its income form rubber estates under S.4(1)(b) r/w S.4(6)(a) and 4(6)(c) of the Agricultural Income Tax Act, 1950. The assessing authority rejected the said claim on the ground that the assessee has not adduced any evidence in support of the said claim and assessed the same to tax under the Act The assessee took up the matter in appeal before the Appellate Assistant Commissioner of Agrl. Income tax & Sales tax, Kottayam. The Appellate Asst. Commissioner noted that S.2 of the Rubber Act, 1947 declares that it is expedient in the public interest that the union should take under its control the rubber industry, and that admittedly the income, if any, derived by the Rubber Board is utilised for the development of Rubber industry. The Appellate Authority further observed that even then it will not fall under S.4(1)(b) of the Act, which states that any agricultural income derived from property held under trust wholly for charitable or religious purpose, to the extent to which such income is applied to such purposes in the State. She further observed that the decision of the Mysore High Court cited by the assessee relates to Coffee Board and Mysore Agricultural Income tax, which cannot be applied in the same sense under the Kerala Agricultural Income tax Act She accordingly, held that the income derived by the Rubber Board is not exempted under S.4(1)(b) of the Act.