9911796707
TMI Blog1984 (8) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 liability which had just then been enhanced before the Corporation and on that account had not actually paid the whole of it. This led to difference of opinion between the Department and the assessee. In course of time the dispute regarding the assessment of the liability of the assessee under the Act reached the Income-tax Appellate Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rising 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 assessee is the owner other than such portions of such property as he may occupy for the purpose of any business or profession carried on by him the profits of which are chargeable to income-tax. As explained by this court in Bhagwan Dass lain v. Union of India [1981] 128 ITR 315, income-tax is payable under this provision in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 " is a notional figure and it does not refer to any actual receipt. It is arrived at by deducting the taxes levied by a local authority, for paying which the owner has assumed the responsibility, from the sum for which the property might reasonably be expected to let from year to year. It is reasonable to treat the annual Value of a house prop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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