Commissioner of Income Tax vs Woodlands

Thanikkachalam J.

At the instance of the Department, u/s 256(1) of the Income Tax Act, 1961, the Department referred the following question for the opinion of

this court :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the urban land tax relating to the earlier

years should also be allowed as a deduction in computing the income of the previous year relevant to the assessment year 1978-79?

The assessee carried on hotel business and it claimed deduction of urban land tax paid by it of Rs. 73,117 relating to the three assessment years,

out of which the Income Tax Officer allowed only one-third as relating to the assessment year 1978-79 and disallowed the balance relating to the

earlier years. On appeal, the Appellate Assistant Commissioner accepted the assessee''s plea for deduction of the entire amount following the

decision of this court in the case of Commissioner of Income Tax Vs. M. Ct. Muthiah, . On further appeal, the Appellate Tribunal upheld the order

passes by the Appellate Assistant Commissioner.

The order passed by the Tribunal is in accordance with the decision of this court in the case of Commissioner of Income Tax Vs. Woodlands

Hotel, . We, accordingly, answer the question referred to us in the affirmative and against the Department. There will be no order as to costs.