Case: Kawasaki Kisen Kaisha Limited Vs. Commissioner of Income Tax, West Bengal II

Civil Appeals Nos. 1072 to 1075 of 1970 relate to the assessment years60 andfor which the previous years were the financial year sending on the 31st March, 1957, 1958, 1959 and 1960, respectively. Civil Appeals Nos. 1076 to 1079 of 1970, relate to the assessment years59 andthe corresponding previous years being the financial years ending on the 31st March, 1956, 1957, 1958 and 1959, respectively. The appellant in each case had been assessed tofor the years mentioned above under the IndianAct, 1922 (hereinafter referred to as " the Act of 1922 "), in respect of its net Indian earnings. In the assessment proceedings the appellant companies had claimed as deductible allowance under section 10(2)(xv) of the Act of 1922, the tax paid by them on their business assets under the Local Tax Law in force in Japan. TheOfficer rejected the claim on the view that the incidence of tax under the Japanese law falls on thein their capacity as the owners of the business assets and not as traders. On appeals preferred by the assessees the Appellate Assistant Commissioner took the view that the tax paid under the Local Tax Law in Japan was an allowable expenditure under section 10(2)(xv) of the Act of 1922. The Tribunal also affirmed the view taken by the Appellate Assistant Commissioner overruling the contention raised on behalf of the revenue that the nature of tax imposed by the Japanese statute was similar to thepayable in India which was not a permissible deduction under section 10(2)(xv)In Civil Appeals Nos. 1072 to 1075 of 1970, the question referred under section 66(2) was" Whether, on the facts and in the circumstances of the case, the property tax and vessels tax paid by the assessee in Japan on its land, buildings and other tangible assets and ships were allowable as deduction under section 10(2)(xv) of the IndianAct, 1922 ? "2. In Civil Appeals Nos. 1076 to 1079 of 1970, the question referred was" Whether, on the facts and in the circumstances of the case, the property tax paid by the assessee in Japan on its vessels was allowable as deduction under section 10(2)(xv) of the IndianAct, 1922 ? "

Court's reasoning:
The broad features of the two statutes we have noted above reveal their basic dissimilarity. Unlike thein India, the municipal property tax of Japan is a local tax imposed on certain specified properties by the city, town or village in which the properties are located. Theis a national tax chargeable on the net wealth of a person with certain specified exemptions. The difference in the manner of determination of the taxable basis of the properties and the rates of taxation emphasize the basic difference between the two taxes. Of course, there are certain points of similarity between the two laws, as there must be, both being taxing statutes, but these similarities do not remove the fundamental difference in the aim, object and the basic structure of the two Acts