COMMISSIONER OF INCOME-TAX, U.P. versus GAPPUMAL KANHALYA LAL

S.C.R.

SUPREME COURT REPORTS

563

in Gappumal Kanhaiya Lal v. Commissioner of Jncome tax ( 1 took a correct view of ) this matter and therein has our approval.

(the connected appeal

the reasoning given

The result is that this appeal is allowed and

the the High Court two questions which were referred by are answered in the affirmative. The appellants will have their costs in the appeal.

Income-tax Tribunal and cited above

the

to

1950

New Piecegoods Bazar Co. Ltd. v. Commissioner of fn,ome-tax, Bombay

Mahajan].

Appeal allowed.

Agent for

the appellants : M. S. Krishnamoorthi

Sastri.

. Agent for the· respondent : P. A. Mehta.

COMMISSIONER OF INCOME-TAX, U.P. v. GAPPUMAL KANHAlYA LAL

1950

May26

[SAIYID FAzL Au, PATANJALI SAsTRI, MEHR CHAND MAHAJAN ;nd MuKHERJEA JJ.] Indian Income-tax (XI of 1922), s. 9 (1) (iv)-lncome from p1"Dperty-Computation of annual value-Deduction of "annual charges not being capital charges"-Municipa/ house-tax and water tax-Whether deductible-Nature of such· charges-U.P. Munici palities Act (II of 1916), ss. 128, 149, 177.

The amount of house-tax and the amount of water-tax imposed by the municipal board of Allahabad under s. 128 of the Unit¢ 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 is subject," within the meaning of s. 9 (1) (iv) of the Indian Income-tax Act, 1922, and should therefore be deducted from the bona fide ai;mual value of the property determined under sub-sections ( l) and - (2) of s. 9 of the Indian Income-tax Act

to which · the property

Judgment· of the Allahabad High Court affirmed. New Pieccgoods. Bazar Co. Ltd. v. Commissioner

of

Income-tax, Bombay fl950l S. C. R. 553) followed.

( 1 ) I.L.R. 1943 Born. 628.

.

4-5 S, C. Tndia (N. D )/58

1950

Commissioner of Income-lax, U.P. v. Gappumal Kanhai:1a Lal

Mahajan].

SUPREME COURT REPORTS

fl9SO)

APPEAL from the High Court of Judicature at

Allahabad (Civil Appeal No. VI of 1949).

This was an appeal from the High Court, Allahabad (Iqbal Ahmad C. J. and Allsop J.) dated 31st August, a reference under section 66 of the Indian in 1944, Income-tax Act, the judgment.

1922. The facts are set out

in

M. C.

Setalvad, Attorney-General

for

Indill

(H. /. 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

).-This appeal

MEHR CH~ND MAHAJAN

from a judgment of the High Court of Judicature at Allahabad dated 31st August, 1944, raises the same Qoints as have been discussed in Civil Appeal No. 66 of .1949 ( 1 ). The Income-tax Appellate Tribunal referred four questions · to the High Court of Judicature at Allahabad under sec tion 66 ( 1) of the Indian Income-tax Act. These questions related to the year of assessment 1939-40. The High Court answered two of the questions in the affirmative relating and two in the negative. to the appeal are those that were answered in the affirm ative and are as follows :-

The two questions

( 1)

1916,

sub-section

the amount of house-tax and

(2) "Whethe1 the amount of water-tax, imposed by the Municipal Board of Allahabad under section 128, ( l) (i) and (x), respectively of the United Provinces clauses and paid by the owner as a Municipalities Act, 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 read with sub-section (2) of secticm (9) of the Act, on the ground that such amount is an annual charge, which is not a capital charge the property is subject within the meaning of clause (iv) of sub-section ( 1) of section o of the Al:t."

to which

(1)

{1 )New Piecef!oods Bazar eo. lid. ". Commissioner of I~. Btm1(Jtt

[1950] S.C.R. 553·

1950

Commissioner of Income-tax, U.P. v. Gappumal K anhaiya Lal

Mahajan].

S.C.R.

SUPREME COURT REPORTS

565

Under section 128 of the United Provinces Munici the municipality can. impose a tax palities Act, 1916, the :in the whole or any part of the municipality on annual value of buildings or Janel or of both, and a water-tax on the annual value of buildings or land or d both. Every such tax on the annual value of build ings or land or both is leviable on the actual occupier of if the property upon which the said taxes are assessed,. he is the owner of the buildings or lands or holds them from the Crown or from on a building or other lease In the Board, any other case the tax ·is leviable if from (vide sectfon 149). Section 177 the property enacts that all sums due on account of· a tax imposed lands or both shall on the annual vall!e of buildings or if 'Subject to the prior payment of be a first charge any, upon such buildings or lands. · ·

or on a building lease from any person. the lessor,

due to His Majesty thereupon,

the l~nd revenue,

let

is

It is apparent therefore

that die prov1S1ons of the United Provinces Act in respect of the levy of the taxes :are substantially similar to the provisions of the Bombay ( 1 ) Act discussed in that appeal and as a result of For the reasons given this appeal stands dismissed with com . that decision and we consider that the High Court of Allahabad has answered the questions above mentioned correctly.

in Civil Appeal No. 66 of 1949

Appeal dismissed.

P. A. Mehta. Agent for the appellant: Agent for the respondent : S. P. Varma.

(') [1950] S.C.R. 55l