TMI Blog1972 (12) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... HEGDE J.-- These are appeals by special leave. They 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 to be deducted under section 10(2)(xv) ?" The High Court answered this question in favour of the revenue. It did so following the decision of this court in Travancore Titanium Products Ltd. v. Commissioner of Income-tax. It may be noted that the assessee companies (there are two companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll as traders. It is for that reason they are assessed only on 40 per cent. of their net income, applying rule 24 of the Rules framed under the Act. According to him the tax paid under the U.P. Act XXXI of 1957 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 incurred by a trader in connection with his business activity. It is true that only 40 per cent. of the net income of the teagrowers are brought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt with reference to which such tax is charged, but does not include any tax chargeable with reference to the value of any particular asset of the business or profession ;...' " We are unable to accept the contention of Mr. Karkhanis that this section has any bearing on the point arising for decision in this cast. Herein we are not dealing with wealth-tax, i.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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
