9911796707
|
Home
Issues:
Interpretation of Section 24(vii) of the Income-tax Act, 1961 regarding deduction of urban land tax paid in arrears for earlier years in computing income from property. Detailed Analysis: The case involved a dispute over whether the payment of urban land tax in arrears for previous years could be considered as a deduction under Section 24(vii) of the Income-tax Act, 1961. The assessee claimed a deduction of Rs. 8,564 for urban land tax paid in the previous year relevant to the assessment year 1970-71. The Assessing Officer disallowed the deduction, but the Tribunal allowed it, leading to the reference of the question to the High Court. The crux of the issue revolved around the interpretation of Section 24(vii) which allows deductions for "any sums paid on account of land revenue or any other tax levied by the State Government in respect of the property." The department contended that deductions could only be related to the specific assessment year, while the assessee argued that the language of the provision focused on actual payment rather than the year to which the payment related. The High Court analyzed the language of Section 24 and compared it with other provisions in the Act related to deductions. It noted that where specific years were mentioned for deductions, the language reflected that requirement. However, in the case of land revenue or tax levied by the State Government, the emphasis was on the actual payment, not the year to which it related. The Court highlighted that the Urban Land Tax Act required payment upon demand, and the use of the term "paid" in Section 24(vii) indicated eligibility for deduction regardless of the year to which the tax related. The Court distinguished the department's reliance on Privy Council decisions, emphasizing that the specific wording of the statute governed deductions under the Income-tax Act. The cited cases were deemed inapplicable to the present situation, where the word "paid" in Section 24(vii) allowed for deductions based on actual payment, irrespective of the year to which the tax obligation pertained. Ultimately, the High Court ruled in favor of the assessee, holding that the urban land tax paid in arrears for earlier years was eligible for deduction under Section 24(vii) of the Income-tax Act, 1961. The judgment clarified that the term "paid" in the provision allowed for deductions based on actual payment, without restriction to the specific assessment year. The Court awarded costs to the assessee and settled the matter in their favor.
|
