ADDITIONAL COMMISSIONER OF INCOME TAX Vs. DINROSE ESTATE

JUDGEMENT

(1.) AT the instance of the Addl. CIT, the following question of law has been referred for the opinion of this Court :

(2.) THE assessee derived income from property which is assessed to tax under ss. 23 to 27 of the IT Act, 1961 (hereinafter referred to as "the Act"). The assessee claimed for the asst. yr. 1964 - 65 deduction of a sum of Rs. 2,826 as the urban land tax payable. There were similar claims for the asst. yrs. 1965 -66 to 1968 -69. The ITO did not accept the assessee's claim for deduction and, therefore, the assessee contested the disallowance before the AAC, who confirmed the disallowance. The assessee, thereafter, took up the matter on appeal to the Tribunal and rested the claim on the provisions of S. 24(1)(v) and S. 24(1)(vii). The Tribunal accepted the claim of the assessee for allowance under S. 24(1)(vii), while rejecting the claim of the assessee under S. 24(1) (v) and, therefore, the Department, feeling aggrieved by the order of the Tribunal, has come on reference raising the question extracted already.

(3.) ON these statutory provisions, the learned standing counsel for the Revenue contended that in the present case the amount paid could not be said to be land revenue, because S. 23 clearly provides that it is in lieu of land revenue due under the Madras City Land Revenue Act, 1851. On the other hand, learned counsel for the assessee submitted that the phrase "in lieu of" used in s. 23 would show that the amount paid by the assessee takes only the place of land revenue and, therefore, that will be land revenue as such. Learned counsel for the assessee further submitted that S. 24(i)(vii) of the Act uses the words "any sums paid on account of land revenue" and the peculiar expression " on account of" would show that it need not necessarily be land revenue, but it could be any other tax also which takes the place of land revenue. We have, therefore, to examine these submissions advanced by the learned counsel.