Full Judgment Text
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PETITIONER:
COMMISSIONER OF INCOME-TAX, U.P.
Vs.
RESPONDENT:
GAPPUMAL KANHAIYA LAL
DATE OF JUDGMENT:
26/05/1950
BENCH:
FAZAL ALI, SAIYID
BENCH:
FAZAL ALI, SAIYID
SASTRI, M. PATANJALI
MAHAJAN, MEHR CHAND
MUKHERJEA, B.K.
CITATION:
1951 AIR 5 1950 SCR 563
ACT:
Indian Income-tax Act (XI of 1922), s.9 (1) (iv)--income
from property--Computation of annual value--Deduction of
"annual charges not being capital charges"--Municipal
house-tax and watertax--Whether deductible--Nature of such
charges--U.P. Municipalities Act (II of 1916), ss. 128, 149,
177.
HEADNOTE:
The amount of house-tax and the amount of water-tax
imposed by the municipal board of Allahabad under s. 128 of
the United Provinces Municipalities Act, 1916, and paid by
the owner as a lessor under s. 149 of the said Act are
"annual charges not being capital charges to which the
property is subject," within the meaning of s. 9 (1) (iv) of
the Indian Income-tax Act, 199.2, and should therefore be
deducted from the bona fide annual value of the property
determined under sub-sections (1) and 12) of s. 9 of the
Indian Income-tax Act.
Judgment of the Allahabad High Court affirmed.
New Piecegoods Bazar Co, Ltd. v. Commissioner of
Income-tax, Bombay ([1950] S.C.R. 553) followed.
(1) I.L,R. 1943 Bom. 628. 73
564
JUDGMENT:
APPEAL from the High Court of Judicature at
Allahabad (Civil Appeal No. VI of 1949).
This was an appeal from the High Court, Allahabad (lqbal
Ahmad C.J. and Allsop J.) dated 31st August, 1944, in a
reference under section 66 of the Indian Income-tax Act,
1922. The facts are set out in the judgment.
M. C. Setalvad, Attorney-General for India
(H. J. Umrigar, with him), for the appellant.
Gopi Nath Kunzru (K. B. Asthana, with him), for the
respondent.
1950. May 26. The judgment of the Court was delivered
by
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MEHR CHAND MAHAJAN J.--This appeal from a judgment of the
High Court of Judicature at Allahabad.dated 31st August,
1944, raises the same points as have been discussed in Civil
Appeal No. 66 of 1940 (1). The Income-tax Appellate Tribu-
nal referred four questions to the High Court of Judicature
at Allahabad under section 66 ( 1 ) of the Indian Income.tax
Act. These questions related to the year of assessment
1930-40. The High Court answered two of the questions in
the affirmative and two in the negative. The two questions
relating to the appeal are those that were answered in the
affirmative and are as follows :--
"Whether (1) the amount of house-tax and (2) the amount
of water-tax, imposed by the Municipal Board of Allahabad
under section 128, sub-section (1) clauses (i) and (x),
respectively of the United provinces Municipalities Act,
1916, and paid by the owner as a lessor under section 149 of
that Act should be deducted as an allowance from the bona
fide annual value of the property determined under sub-
section (1) read with sub-section (2) of section 9 of the
Act, on the ground that such amount is an annual charge,
which is not a capital charge to which the property is
subject within the meaning of clause (iv) of sub-section (1)
of section 9 of the Act."
(1) New piecegoods Bazar Co. Ltd. v. Commissioner of
Income-tax, Bombay [1950] S.C.R. 553.
565
Under section 128 of the United Provinces Municipalities
Act, 1916, the municipality can impose a tax in the whole or
any part of the municipality on the annual value of build-
ings or land or of both, and a water-tax on the annual value
of buildings or land or of both. Every such tax on the
annual value of buildings or land or both is leviable on the
actual occupier of the property upon which the said taxes
are assessed, if he is the owner of the buildings or lands
or holds them on a building or other lease from the Crown or
from the Board, or on a building lease from any person. In
any other case the tax is leviable from the lessor, if the
property is let (vide section 149). Section 177 enacts that
all sums due on account of a tax imposed on the annual value
of buildings or lands or both shall, subject to the prior
payment of the land revenue, i.f any, due to His Majesty
thereupon, be a first charge upon such buildings or lands.
It is apparent therefore that the provisions of the
United Provinces Act in respect of the levy of the taxes are
substantially similar to the provisions of the Bombay Act
discussed in Civil Appeal No. 66 of 1949 (1). For the rea-
sons given in that appeal and as a result of that decision
this appeal stands dismissed with costs and we consider that
the High Court of Allahabad has answered the questions above
mentioned correctly.
Appeal dismissed.
Agent for the appellant: P.A. Mehta.
Agent for the respondent: S.P. Varma.
(1) [1950] S.C.R. 553.
566