The main legal point established in the judgment is that disallowed expenses related to tea plantation, manufacture, and sale could be allowed by the Agricultural Income Tax Officer under the Assam Agricultural Income Tax Act, 1939 and relevant rules, despite being disallowed under the Income Tax Act, 1961.

T. Nandakumar Singh, J.

1. Civil Rule No. 6135 of 1998 and Civil Rule No. 6136 of 1998 are filed by one petitioner Warren Tea Limited 31, Chowringhee Road, Calcutta which is a Company incorporated under the Companies Act, 1956 assailing the order of the Deputy Commissioner of Taxes, the order of Commissioner of Taxes, Guwahati and the judgment and order passed by the learned Board of Revenue on the similar question of facts and law and accordingly these two writ petitions are being disposed of by this common judgment and order.

2. Heard Mr. A.K. Goswami, learned senior counsel assisted by Mr. A. Talukdar, learned Counsel appearing for the petitioner as well as learned Government Advocate appearing for the respondents.

3. The sole question posed for decision by this Court in these two writ petitions is whether or not the portion of the claim for deduction disallowed by the Income Tax Officer while making assessment because of limit provided in the Income Tax Act, 1961 and Income Tax Rules, 1962 could be allowed by the Agricultural Income Tax Officer under the Assam Income Tax Act, 1939 and the Assam Agricultural Income Tax Rules, 1939 provided the said portion of the claim relates to plantation, manufacture and sale of tea.

4. For answering the question posed in the present writ petition, it would be apposite to make a short resume to the relevant provisions of (i) Assam Agricultural Income Tax Act, 1939 (ii) Assam Agricultural Income Tax Rule, 1939 (iii) Income Tax Act, 1961 and (iv) Income Tax Rules, 1962.

5. The concise facts which should be sufficient for answering the above question posed in the present writ petitions are that assessee/writ petitioner is a Company incorporated in India under the provision of the Companies Act, 1956 in compliance with the requirement under the Foreign Exchange Regulation Act, 1973, having 13 tea estates in Upper Assam engaged in the business of harvesting tea leaves, manufacture of black tea and the marketing of the produce. For the assessment year 1981-82 for which the Civil Rule No. 6135 of 1998 is filed, the Income Tax Department had assessed the writ petitioner and assessment order dated 5.3.1984 was passed by the Assessing Authority. The Agricultural Income Tax Officer, Assam had proceeded with the assessment of the petitioner Company under Section 20(3) of the Assam Agricultural Income Tax Act, 1939 (for short Act, 1939). On 19.11.1984 the Agricultural Income Tax Officer, Assam, Guwahati (for short AITO) had passed assessment order dated 19.11.1984 for the assessment year 1981-82 assessing Agricultural Income Tax, but the AITO had disallowed certain expenses claimed by the writ petitioner but falling under Sections 40A(5), 37(2A), 80VV of the Income Tax Act, 1961 and the Rules 6D of the Income Tax Rules, 1962 purportedly on the ground that such claims/expenses were disallowed under the provision of the Income Tax Act, 1961.

6. The petitioner being aggrieved by the said order of the AITO dated 19.11.1984 preferred an appeal before the Assistant Commissioner of Taxes (Appeals). The Assistant Commissioner of Taxes (Appeals) vide his order dated 24.4.1986 relying on the provisions of Section 8(2)(f)(vii) of the Act 1939 with reference to second proviso to Section 8 and the Rule 5 of the Assam Agricultural Income Tax Rules, 1939 held that expenditures which were not allowed under Section 40A(5), Section 80VVof the Income Tax Act and the Rule 6D of the Income Tax Rules, 1962 are allowable expenditure and accordingly reduced the amount of taxes assessed to the extent involved in the deduction of claims, but the claim for deduction under Section 37(2A) was not allowed.

7. The Deputy Commissioner of Taxes, Guwahati invoking the provision of Section 27 of the Act 1939 in respect of the assessment relating to the assessment years 1978-79, 1979-80, 1980-81 and 1981-82 issued notice to the petitioner. Ultimately, the Deputy Commissioner of Taxes passed impugned order dated 1.3.1990 canceling the