PURTABPORE COMPANY LTD. versus STATE OF UTTAR PRADESH

Citation: [1971] 1 S.C.R. 426 · Decided: 28-04-1970 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Appeal(s) allowed

Judgment (excerpt)

426 
PURTABPORE COMPANY LTD. 
v. 
STATE OF UTTAR PRADESH 
April 28, 1970 
[J. C. SHAH, K. S. HEGDE AND A. N. GROVER, JJ.] 
U.P. A11rit:11/t11ral J11co111e-ti1x Act of 1948 '" 6(2) (iv)-Expenses 
of <·11/tivalion-Wht1t t1re, ... 
The ussessce- a sugar factory, cPrried on agricultu'ral farming on a 
large scale and had several farll16. 
It engaged on each farm a Manager 
with necessary technical, clerical and menial staff to assist him. 
These 
persons were claimed to have been employed exclusively for the purpose 
of the farm and were provided with accommodation, medical facilitiei;, 
;ind the allowances. On the question whether the expenses on the manage· 
ment charges of the Establish.ment. rent inspection, repairs of bunglows 
and offices, expenses on car, travelli1:1g, postage periodicals, asse86ees' eon~ 
rrihution to Provident Fund, could be allowed as expenses of cultivation 
under s. 6(2)(b)(iv) of •he U.P. Agricultural Income-tax Act, 
1948, 
this Court; 
HELD : The amount claimed by the assessee as expenses on mana~c· 
ment and miscellaneous expenses could be allowed under s. 6(2) (b) (tv) 
if und to the extent that it was determined that they we're incurred for 
the manaaemcnt, su~rvision, organisation, technical kn0wledge and al'iS· 
lance and other allted matters for the purpose of the raising of crops, 
their marketing and 
trans11ortation. 
An 
apportionment 
may 
become 
necessary if it was detcrmmed that the entire expense was not incurred 
•trictly for those purposes. f433 A·C] 
What has to be essentially determined under s. 6 (2)(b) (iv) is whether 
the expenses were incurred on or for the purpose of the entire work and 
-0perations involved in raising the crops. making the same fit for market· 
ing and the transportation of the produce to the 
market. 
The word 
"raising the crop" cannot be confined simply to the ploughing of the Jund, 
sowing the seed and cutting the harvest. Section 6(2) (b) (iv) is not to 
be construed in a narrow and pedantic sense and must be given its full 
dfect in the background of modern large scale farming and the organi· 
ution required for it. [432 F·H] 
It Is well known that modern agricultural farming which has become 
mechanised involves o high degree of organisotion, technical sKill etc .. in 
the same way as a well run industry. 
If agricultural production has to 
be obtained with optimum results it is necessary that tl\ere should be a 
proper supervisory ancl other staff as 
also the 
employment 
of such 
means as would be conducive to maximum, production and proper mar· 
keting of the produce. It is axiomatic that the staff would require resi· 
dential accommodation which will have to be kept in a proper state of 
repair. 
The staff will also need medical attention and other 
ameniti.s 
which are normally afforded to employees now a days. The benefit of 
provident fund ca,n hardly be denied to them when it hH ,become the 
accepted and normal feature in all forms of employment. in 
modern 
times. 
If any motor vehicle is being maintained for enabling the super· 
visory or other staff to look after the farm the expenses incu'rred there· 
on cannot be regarded as foreign to farming operations. The expendi· 
ture incurred on postage, telegrams, printing and stationery for the purpose 
A 
B 
c 
.D 
E 
F 
G 
H 
A 
B 
c 
D 
E 
F 
G 
H 
PURTABPORE co. v. u. P, STATE (Grover, J.) 
427 
of and in connection with farming would also be allowable. If cortain 
periodicals are being subscribed for obtaining technical knowledge and 
up-to-date information in the matter of agricultural farming it is difl1cult 
to see how that could be disallowed. <[432 C-F] 
Agricultural Income-tax No. 3'66 of 1953 decided by the Allahabad 
High Court on May 11. 1956 approved. 
Mrs. Bacha F. Guzder, 
Bo1nhay v. 
Co1n111issioner of Inco111e.tax 
Bombay, Income Tax Reports (Vol 27} 1955 page I, Commi.uinner of 
lnco1ne-tax, West.Bengal, Calcutta v. ·Rajci Benoy Kun1ar Sahas 
~o'" 32 
1.T.R. 466 distinguished. 
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 1192 
and 1276 of 1966. 
· Appeals by special leave from the judgments and orders dated 
September 30, 1965 and November 23, 1965 of the Allahabad 
High Court in Agricultural Income-tax Reference Nos. 142 of 
1954 and-232 of 1957. 
Gopinath K11n:r11, V. K. S. Chaudhurv and Ganpat R11i, for 
the appellant (in both the appeals). 
' 
C. B. Aganl'tl/c1 and 0. P. Rana, for the respondent( in both 
the appeals). 
The Judgment of the Cou~ was deliver

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