Case: Commissioner Of Income-Tax, U.P Vs. Gappumal Kanhaiya Lal

1. This appeal from a judgment of the High Court of Judicature at Allahabad dated 31/8/1944 raises the same points as have been discussed in Civil Appeal No. 66 of 1949. The Income-tax Appellate Tribunal referred four questions to the High Court of Judicature at Allahabad under S. 66 (1), Income-tax Act. These questions related to the year of assessmentThe 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 (l) the amount of house tax and (2) the amount of water tax, imposed by the Municipal Board of Allahabad under S. 128, sub-s- (1) cls (i) and (x), respectively of the United Provinces Municipalities Act, 1916, and paid by the owner as a lessor under S. 149 of that Act should be deducted as an allowance from the bona fide annual value of the properly determined under sub-s. (1) read with sub-s. (2) of S. 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 cl. (iv) of sub-s. (1) of S. 9 of the Act."

Reasoning: 2. Under S.128, United Provinces Muncipalities Act, 1916, the municipality can impose a tax in the whole or any part of the municipality on the annual value of buildings or land or of both, and a water tax on the annual value of buildings or land or 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 S. 149). S. 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, if any, due to His Majesty thereupon, be a first charge upon such buildings or lands.3. 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.