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Judgment
Dr. B.P. Saraf, J.—By this reference u/s 256(1) of the Income Tax Act, 1961 the Income Tax Appellate Tribunal, Mumbai, has referred the following two questions of law to this Court for opinion.
At the instance of the assessee :
"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that Municipal taxes of Rs. 15,328/- paid by the assessee during this accounting year ending on 30-6-1978 was not allowable as a statutory deduction while computing its income from house property on the reason that the taxes pertained for a period from 1-4-1976 to 1-4-1977; and the liability had been incurred prior to the accounting period relevant to the assessment year 1979-80?"
At the instance of the revenue :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the claim for deduction u/s 80-MM made in the revised return filed by the assessee after passing of the draft assessment order u/s 144B, was valid in law for being considered its eligibility on merits?"
So far as the controversy in the second question is concerned, the same is covered by the decision of the Supreme Court in Panchamahal Steel Ltd. Vs. U.A. Joshi, ITO and Another, , in favour of the revenue. Following the same, question No. 2 is answered in the negative i.e. in favour of the revenue and against the assessee.
So far as the first question is concerned, the uncontroverted factual position is that the Municipal taxes amounting to Rs. 15,328/- which the assessee paid during the accounting year ending on 30-3-1978, relevant to the assessment year 1979-80 pertained to the period from 1-4-1976 to 1-4-1977. There is also no dispute about the fact that the demand in respect of the same was also made by the society on 21-6-1977. Thus, neither the demand was made in the accounting year relevant to the assessment year under consideration, nor the liability pertained to the said accounting year. That being so, the liability was incurred by the assessee not in the previous year relevant to the assessment year under consideration i.e. 1979-80 but in the earlier year. The Tribunal was right in holding that the above amount was not allowable as a statutory deduction in computation of income from house property of the previous year relevant to the assessment year 1979-80. Accordingly, we answer this question in the affirmative i.e. in favour of the revenue and against the assessee. 4. Reference is disposed of accordingly with no order as to costs.
Reference answered in favour of revenue.