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Supreme Court of India

Commissioner Of Income-Tax, U.P vs Gappumal Kanhaiya Lal on 26 May, 1950

Equivalent citations: 1951 AIR, 5 1950 SCR 563, AIR 1951 SUPREME COURT 5

Author: Saiyid Fazal Ali

Bench: Saiyid Fazal Ali, Mehr Chand Mahajan, B.K. Mukherjea

           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 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.

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.