For the assessment year 1955 56, the assessee claimed to deduct interest on this sum, amounting to Rs.
So a sum of Rs.
So the borrowing has to be limited to 25 per cent of Rs.
80,000 has been borrowed from various parties, for the maintenance of the estate.
Appeal by special leave from the judgment and order dated January 19, 1960 of the Madras High Court in T.R.C. No.
22,628 9 8 to wards interest.
The relevant part of the assessment order is reproduced below Interest on borrowings Rs.
Ranganadham Chetty and A. V. Rangam, for the appellant.
The assessee has claimed Rs.
The gross income is Rs.
He then appealed to the Madras Plantations Agricultural Income Tax Appellate Tribunal, hereinafter refereed to as the Tribunal.
21,057 15 1.
26,177 11 6.
21,057 15 1 is disallowed 22,628 9 8 minus 1,570 10 7 .
The assessee appealed to the Assistant Commissioner of Agricultural Income Tax, without success.
The assessee filed a revision application to the High Court under s. 54 l of the Act, and raised the following question before it Question of law raised for decision by the High Court Whether interest paid on monies borrowed for the purchase of the plantation is expenditure of the nature referred to in section 5 e of the Act and should therefore be deducted in assessing the income of the Plantation during the year.
1,04,710 13 11.
But this Court gave special leave to the appellant to appeal against the judgment and order of the High Court.
Under section 5 k the interest has to be limited to six per cent on an amount equivalent to 25 per cent of the agricultural income in that year.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The Agricultural Income Tax Officer, Gudalur, disallowed Rs.
2,90,000, at interest varying from seven to eight per cent per annum.
21,057 15 1, allowing Rs.
3,10,000, he borrowed Rs.
1,570 10 7, under S. 5 k of the Madras Plantations Agricultural Income Tax Act Madras Act V of 1955 hereinafter referred, to as the Act .
P. Lal, for the respondent.
22,628 9 8.
701/1963.
It is seen that about Rs.
Out of the sale price of Rs.
1,04,710 13 11, which is Rs.
in Gudalur, Nilgiris, Madras State.
April 30, 1964.
53 of 1957.
The Judgment of the Court was delivered by SIKRI J. The respondent, hereinafter referred to as the assessee, purchased an estate in 1950, known as Silver Cloud Estate, companysisting of tea, companyfee and rubber plantations,.
