Commissioner of Income Tax, Uttar Pradesh vs Gappumal Kanhaiya Lal

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 1949 The New Piecegoods Bazar Co. Ltd., Bombay Vs. The Commissioner of Income Tax, Bombay, . The income tax Appellate Tribunal referred four questions to the High Court of Judicature at Allahabad u/s 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 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 u/s 128, sub-section (1), clauses (i) and (x), respectively of the United Provinces Municipalities Act, 1916, and paid by the owner as a lessor u/s 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."

u/s 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 buildings 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, if 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 The New Piecegoods Bazar Co. Ltd., Bombay Vs. The Commissioner of Income Tax, Bombay, . For the reasons 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.