9911796707
TMI Blog1972 (12) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... y are directed against the decision of the High Court of Allahabad in a reference under section 66(1) of the Indian Income-tax Act, 1922 (to be hereinafter referred to as " the Act "). The common question of law referred in these appeals was : " Whether the tax paid by the assessee-company on the tea-garden lands under the U.P. Large Land Holdings Tax Act, 1957 (U.P. Act XXXI of 1957), is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Products case holding that if the expenditure laid out by the assessee is as an owner-cum-trader and the expenditure is really incidental to the carrying on of his business it must be treated to have been laid out by him as a trader and as incidental to his business. On the basis of that rule it came to the conclusion that the wealth-tax paid by a trader on his business assets is liable to be dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 57 is a tax levied on the owners and not on the traders. Consequently, the ratio of the decision of this court in Indian Aluminium Co.'s case is inapplicable. We are unable to accept this contention as correct. A tea-grower is considered under the Act, read with the Rules, as an owner-cum-trader. Therefore, any item of expenditure incurred by him must be considered as an item of expenditure incurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion reads : " 2. Amendment of section 40.---In section 40 of the Income-tax Act, 1961 (43 of 1961) (hereinafter referred to as the principal Act), after sub-clause (ii) of clause (a), the following sub-clause shall be, and shall be deemed always to have been, inserted, namely : '(iia) any sum paid on account of wealth-tax. Explanation.---For the purposes of this sub-clause, " wealth-tax " m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e., a tax on net assets nor with any of the taxes referred to in the Explanation. In the result these appeals are allowed and the answer given by the High Court is revoked and the question referred to the High Court is answered in favour of the assessees. In other words, the answer to the question is that, on the facts and in the circumstances of the case, the tax paid under the U.P. Large Land ..... X X X X Extracts X X X X X X X X Extracts X X X X
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