TMI Blog1933 (4) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... in question was an assessment made for the year 1929-30. The assessee was assessed on an income of ₹ 57,979. Of this ₹ 14,425 were derived from property owned by the assessee and were assessed under sec. 9 of the Income Tax Act. The remainder, ₹ 43,554 were assessed under sec. 12 and were derived from the rents of buildings erected by the assessee upon land leased from the Agra Cantonment authority. The assessee appealed and his appeal was rejected by the Assistant Commissioner. He then applied under sec. 66 that certain questions of law alleged to arise should be referred to the High Court. The material facts are these: The assessee took a lease for twenty-five years from the Agra Cantonment authority. It does not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion was:- In the circumstances stated in question (i) is the assessee entitled, in accordance with sec. 12, to allowance for the expenditure incurred in the erection of the buildings? The third question was:- Is the allowance receivable in the form of an annual deduction equal to the amount of the expenditure divided by the years of the term for which the assessee holds the land on lease? The first of those questions was answered by the Court holding that the assessment should be made under sec. 12, which was in fact the section under which the Commissioner had proceeded. In regard to the second and third questions, the Court held that the assessee was entitled to a deduction from the rents in order to ascertain the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided by this Act, the following heads of income, profits and gains, shall be chargeable to income-tax in the manner hereinafter appearing, namely -then there is a number of items of which the third is Property ; the fourth is Business, and the sixth is Other sources. Sec. 9 deals with the head Property, and states: The tax shall be payable by an assessee under the head 'Property' in respect of the bona fide annual value of property consisting of any buildings or lands appurtenant thereto of which he is the owner, other than such portions of such property as he may occupy for the purposes of his business, subject to the following allowances, namely -then a number of allowances are set forth which may be made. Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, or that sec. 9 is not applicable to this case. The question therefore, is whether the allowance which the High Court have considered a permissible allowance is in fact justified by the terms of sec. 12. In their Lordships' judgment it is not. Under sec. 12, sub-sec. (2), is specified what may be allowed as an allowance for any expenditure (not being in the nature of capital expenditure) incurred solely for the purpose of making or earning such income, profits or gains, provided that no allowance shall be made on account of any personal expenses of the assessee. In their Lordships' view, on the true construction of that sub-section, the allowance for any expenditure incurred must be an allowance for expenditure incurred in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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