THE COMMISSIONER OF AGRICULTURALINCOME-TAX, KERALA versus THE PLANTATION CORPORATION OF KERALA LTD., KOTTAYAM

Citation: [2000] SUPP. 5 S.C.R. 135 · Decided: 29-11-2000 · Supreme Court of India · Bench: S.P. BHARUCHA · Disposal: Appeal(s) allowed

Judgment (excerpt)

THE COMMISSIONER OF AG RI CULTURAL 
INCOME-TAX, KERALA 
v. 
THE PLANTATION CORPORATION OF 
KERALA LTD., KOTTAYAM 
NOVEMBER 29, 2000 
[S.P. BHARUCHA, DORAISWAMY RAJU AND 
MRS. RUMA PAL, JJ.] 
Agricultural Income Tax 
A 
B 
c 
Kera/a Agricultural Income-tax Act, 1950-Section 5; Explanation 2-
Rent paid to landlord for the entire estate including the area covered by 
immature plants and interest paid on the loan obtained and utilised for the 
purpose of cultivation both mature yielding and unyielding immature plants- D 
Whether could be allowed deduction-Held, no. 
Interpretation of Statutes: 
Explanation under a section-Whether applies to the whole section or 
to a particular clause of the section-Held, Explanation applies to the whole E 
section-Kera/a Agricultural Income-Tax Act, 1950-Section 5 clause OJ 
Explanation 2. 
Respondent-assessee claimed deduction for rent paid to landlord in 
respect of the entire estate including the area covered by immature oil palm 
plants and for interest paid on the loan obtained and utilised for the purpose p 
of cultivation both mature yielding and unyielding immature oil palm plants 
in the returns filed under the Kerala Agricultural Income-Tax Act, 1950. The 
Revenue as well as the Tribunal disallowed the deductions on the basis of 
Explanation 2 to Section 5 of the Act. In appeal by the assessee, the High 
Court allowed the deductions holding that Explanation 2 to Section 5 of the 
Act is an explanation only to clause (j) of the Section and not to the other sub- G 
clauses of the Section. Hence the appeals by the Revenue. 
Allowing the appeals, the Court 
HELD : 1.1. Section 5 in providing for computation of agricultural 
135 
H 
136 
SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R. 
A income for the purpose of the Kera la Agricultural Income-Tax Act, 1950 
stipulates that the agricultural income of a person shall be computed after 
making the various deductions enumerated in Clauses(a) to (n) to the extent 
mentioned and also in the manner specified therein. It is an admitted position 
and the High Court also proceeded on such basis that clause (j) of Section S 
B of the Act is in the nature of a residuary provision, in which event, it 
necessarily means that the other clauses are in relation to a few of the 
enumerated items of expenditure envisaged for deduction and the mere fact 
that some alone are illu~trated specifically do not render those provisions to 
be read in to truncated or disjointed manner from the residuary clause 
ignoring the avowed object of section 5 as a whole, viz., computation of 
C agricultural income, as defined in Section 2(a) of the Act after making the 
deductions to which an assessee is found eligible. When Explanation 2 
specifically uses the words, "nothing contained in this section shall be ..... " 
expressing a specific intention to encompass the entire Section 5 of the Act 
reading it otherwise and to confine its relevance and application to only clause 
D (j) of Section 5 would amount to not only rewriting the statutory provision by 
the Court, but also doing violence to the plain and simple language used. When 
an Explanation or Proviso was to apply to any one clause or limb alone of 
Section 5, the legislature has chosen to incorporate it even in the very Section 
below the specific or particular clause which it was meant to explain or except 
as in clause (c) or (I) and (n). The fact that instead of doing so Explanation 
E 2 has been incorporated at the end of Section 5 along side Explanation I, which 
also used the words "for the purpose of this section .... ", the intention of the 
legislature must be considered to have been made certain, positive and 
unambiguous, leaving no room or scope whatsoever for having recourse to 
either internal or external aids for interpretation or construction of the said 
provision. (142-A-F) 
F 
1.2. The High Court appears to have been carried away by the fact of 
some assumed similarity of the purpose of expenditure envisaged in clause 
(j) of Section 5 and those covered by Explanation 2 and from the further fact 
of retrospective effect having been given to the said Explanation with effect 
G from 1.4.1951, to presume that in doing so the legislative intention indicated 
was to avoid refunds being made on account of Travancore Rubber & Tea Co. 
Ltd. case. This is fallacious and cannot be so presumed. The decision declari,ng 
the position of law on the scope of clause (j) to Section 5 might have been the . 
o

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