TaxTMI 
TaxTMI 
1970 (12) TMI 18
X X X X Extracts X X X X
X X X X Extracts X X X X
....elevant accounting period being the year ending 31st August, 1958. The assessee claimed a deduction of Rs. 250 which was paid by it on account of professional tax. Both the Income-tax Officer and the Appellate Assistant Commissioner disallowed this amount in view of the provisions of section 10(4) of the Indian Income-tax Act, 1922 (hereinafter called " the Act "). The Appellate Tribunal, however, held it to be an allowable deduction, because the assessee had to pay this tax in order to carry on its business. This finding was given relying on the decision of the Allahabad High Court in Simbholi Sugar Mills Ltd. v. Commissioner of Income-tax. The Commissioner of Income-tax then made an application requiring the Tribunal to refer certain ques....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt. The position taken by the revenue, on the other hand, was that the assessee could not claim this deduction in view of the provisions of section 10(4) of the Act, the relevant part of which is : " Nothing in clause (ix) or clause (xv) of sub-section (2) shall be deemed to authorise the allowance of any sum paid on account of any cess, rate or tax levied on the profits or gains of any business, profession or vocation or assessed at a proportion of or otherwise on the basis of any such profits or gains....." Their case was that since ths tax was levied on the profits or gains of the assessee's business or in any case assessed at a proportion of or otherwise on the basis of any such profits or gains therefore, this sum could not be allow....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the profession tax paid under section 111 of the Madras City Municipal Act should be allowed as a proper deduction from, the taxable income " as an expenditure incurred solely for the purpose of the profession " of the assessee within the meaning of section 11 of the Act. The Commissioner of Income-tax was of the opinion that the deduction claimed was not an allowable item. While giving their opinion on this question, the learned Judges observed : " The answer to the question put to us depends in our opinion upon the nature of the profession tax levied by the municipality. If the profession tax is a contribution from the income of the assessee to the municipalities it will stand on the same footing as income-tax itself which is such a pa....