ISABELLA COAL COMPANY Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) This is a Reference under Section 66(2) of the Income Tax Act, XI of 1922.

(2.) The assessee, the Isabella Coal Company, paid road and public works cess in respect of their coal mine, and claimed a deduction of the amount paid by them as cesses, in computation of the income-tax under Clauses (viii) and (ix) of Section 10(2) of the Income Tax Act, XI of 1922, and the question referred to us is whether the sums paid by them as cesses should be deducted under Clauses (viii) and (ix) of Section 10(2) of the Act.

(3.) (sic) lays down that the "tax shall be payable by an assess under the head business in respect of the profits or gains of any business carried on by him." (2) Such profits or gains shall be computed after making the following allowances, namely: (Omitting the other clauses). (viii) Any sum paid on account of land revenue, local rates or municipal taxes in respect of such part of the premises as ia used for the purposes of the business; (ix) any expenditure, (not being in the nature of capital expenditure) incurred solely for the purpose of earning such profits or gains.