TMI Blog1984 (8) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitution by the Commissioner of Income-tax, West Bengal, Calcutta, against the decision of the High Court of Calcutta in Income-tax Reference No. 573 of 1971. The respondent, Dalhousie Properties Limited was an assessee under the I.T. Act, 1961 (hereinafter referred to as " the Act "), in the assessment year 1966-67, the relevant previous year being the year ending March 31, 1966. It owned extensive properties and its income from rents realised was substantial. In the assessment year in question, the assessee claimed: deduction of Rs. 1,78,784 which represented the tax levied by the Corporation of Calcutta as a deductible item while computing its income from house property. It appears that the assessee had questioned the extent of liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) For the purposes of section 22, the annual value of any property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year : Provided that where the property is in the occupation of a tenant and the taxes levied by any local authority in respect of the property are, under the law authorising such levy, payable wholly by the owner, or partly by the owner and partly by the tenant, a deduction shall be made equal to the part, if any, of the tenant's liability borne by the owner ........ Under s. 22 of the Act what is chargeable to income-tax under the head " Income from house property " is the annual value of property consisting of any buildings or lands appurtenant thereto of which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is whether the expression " borne by the owner " would refer to the amount of tax which the owner was liable to pay or the amount of tax which he had actually paid in discharge of the said liability. It is true that the expression " borne " may refer to either the liability which a person is liable to discharge or the actual sum paid by him in discharge of that liability. But we agree with the High Court that in the present context it should be construed as referring to the former, namely, the amount of tax which the owner is liable to discharge as stated in the proviso to s. 23(1) of the Act and not the latter one. The reason for taking this view flows from the scheme of the Act itself. As mentioned earlier, the expression annual value " ..... X X X X Extracts X X X X X X X X Extracts X X X X
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