COMMISSIONER I T Vs. GURUPADA DATTA

JUDGEMENT

(1.) This is an appeal from the judgment of the High Court of Judicature at Fort William in Bengal, dated June 10, 1943, delivered on a reference made to it by the Appellate Tribunal under Section 66 of the Indian Income-tax Act, 1922. The respondents did not appear in the appeal.

(2.) The respondents constitute a Hindu undivided family, carrying on business at Tejhati in Birbhum district, and also at Nalhati and Lohapur, two other villages there. In assessing the respondents to income tax for the year 1940-41, on the basis of the previous year 1939-40, the Income-tax Officer assessed the total assessable income of the respondents as a Hindu undivided family at Rs. 17,250, in which he included a sum of Rs. 6,563, as being the profits of the Nalhati business assessable under Secs.6(iv) and 10 (J) of the Act, The Income-tax Officer disallowed a claim by the respondents, to deduct as an allowance authorised by Section 10(2) of the Act a sum of Rs. 84 paid by them as a union board rate in Nalhati under the provisions of the Bengal Village Self-Government Act, 1919. The respondents appealed under Section 30 against the order of .the Income-tax Officer to the Appellate Assistant Commissioner of Income-tax, Calcutta, B Range, on various grounds, with only one of which the present appeal is concerned,, namely the claim to deduct the Rs. 84 above mentioned, but the Appellate Assistant Commissioner affirmed the disallowance of the deduction. The respondents then appealed under Section 33 of the Act to the Appellate Tribunal, who allowed the appeal, holding that the payment of the Rs. 84 was made for the purpose of the business and was an allowable deduction, in computing the profits of the Nalhati branch. On the application of the present appellant, the Tribunal made the reference under Section 66, the question referred being Whether the rate imposed under the provisions of the Bengal Village Self- Government Act, 1919, on a person occupying a building within the Union, and using the same for the purpose of business is an allowable deduction in computing the profits of the business under section 10 of the Indian Income-tax Act ? It will be convenient, in the first place, to state the relevant provisions of Section 10 of the Indian Income-tax Act, 1922, as it stood amended at the material date:- 10. (1) The tax shall be payable by an assessee under the head profits and gains of .business, profession or vocation in respect of the profit or gains of any business, profession or vocation carried on by him. (2) Such profits or gains shall be computed after making the following allowance namely:- (ix) any sums paid on account of land revenue, local rates or municipal taxes in respect of such part of the premises as is used for the purposes of the business, profession or vocation; (xii) any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of such business, profession or vocation; (4) Nothing in Clause (ix) or Clause (xii ] 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...

(3.) In answering affirmatively the question of law submitted to them the learned Judges contented themselves with expressing agreement with the opinion of the Appellate Tribunal and their reasons therefor.