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TMI Blog1967 (12) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... co-owner expired on the 30th June, 1951. The ground rent payable under the lease was ₹ 254 per month. After the expiry of this lease, the assessee and the co-owner continued in possession of the land. There were negotiations between the assessee and his co-owner on the one hand and the railway authorities on the other, for the renewal of the lease. The railways were agreeable to the renewal of the lease but wanted an enhancement of the ground rent. The assessee and the co-owner, on the other hand, were desirous of having the lease renewed for a period of 15 years at the original rent of ₹ 254 per month. These negotiations were finally concluded and a fresh lease agreement was entered into in 1957. Thereafter, on the 1st of November, 1957, the railway authorities made a demand on the assessee requiring him to pay the arrears of ground rent calculated at the difference between the former rent of ₹ 254 per month and the enhanced rent of ₹ 540 per month for the entire period from the 1st July, 1951, to the 30th September, 1957, amounting to ₹ 21,487.50 P. In the assessment for the assessment year 1958-59, the assessee claimed this amount as an allowance p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come from property computed under section 9 of the Indian Income- tax Act. Now, the income-tax chargeable under the Indian Income-tax Act is annual in its structure and organisation. Under section 3 of the Act, which is the charging section, tax is charged in respect of the total income of the previous year. Each previous year is a distinct unit of time for the purpose of assessment and the income which is made the subject of charge is the total income of this unit of period. Total income as defined in section 2(15) of the Act means total amount of income, profits and gains referred to in sub-section (1) of section 4 computed in the manner laid down in the Act. Sub-section (1) of section 4 defines the range of total income. The total income, whose range is so defined in section 4(1) is classified in section 6 into different heads and the following sections from sections 7 to 12 prescribe the mode of computation of the total income under these heads. It would thus be seen that under the Indian Income-tax Act, income-tax is charged on the taxable income of each previous year which is computed in the manner provided under the Act. Income taxable as income from property would, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that what is allowed thereunder is the amount of the premium paid in respect of the previous year only. Item No. 5 relates to sums paid on account of land revenue in respect of the property. The allowance permissible under this item is conditional on the amount being paid as in the case of item No. 3. Although the land revenue mentioned in this item is not specified as annual land revenue, it would appear to us that, having regard to the fact that the land revenue consists of a charge for the year, the amount of land revenue referred to in this item would be the amount for the year, the allowance in respect thereof being claimable only on its having been paid as in the case of item No. 3. Item No. 7 is in respect of vacancies during the previous year and the allowance claimable in respect thereof is clearly in respect of the previous year only. We now come to item No. 4 with which we are concerned in this case. That item is as follows: Where the property is subject to a mortgage or other capital charge, the amount of any interest on such mortgage or charge; where the property is subject to an annual charge not being a capital charge, the amount of such charge; where the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As we have already pointed out, the payment in respect of the ground rent is not dependent upon whether it is paid or not. If the property is subject to ground rent, the amount of the ground rent will be allowed even if it is not paid. That being the position, the claim in respect of the ground rent, in our opinion, does not arise as and when it is paid, but it arises independently thereof in each previous year and will be claimable in each previous year in respect of the ground rent for that year. Mr. Rajgopal, the learned counsel appearing for the assessee, tried to argue that there was a distinction between interest on mortgage or on a capital charge and ground rent in respect of the property. According to him, whereas interest on mortgage would be an annual payment, ground rent need not be annual but may depend upon the agreement between the parties. In the present case, he points out that the ground rent was fixed per month and was also payable per month. According to him, therefore, the ground rent allowable under the provision would be as is claimed from the assessee or as is paid by him. In the present case, according to the learned counsel, the claim for the additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been paid. The sixth is defined only by a limit and the seventh is left to the discretion, as regards amount, of the Income-tax Officer. In this context I am of opinion that the absence of the word 'paid' in the fourth clause is not without significance. I am not satisfied that the legislature has intended to charge on the basis of the sum which a hypothetical tenant would give save upon the assumption made in favour of the assessee that the real income of an incumbrancer is the difference between the yearly value and the interest. The absence of the word paid in the fourth clause applies equally to all the items specified therein and it would not, therefore, be possible to make a distinction between the items by reference to the columns in the income-tax return form made under the rules. It is no doubt true that the rules are statutory rules made under section 59 of the Act and under sub- section (5) of the said section the rules, on publication in the Official Gazette, would have the same effect as if enacted in the Act. However, as pointed out by Rankin C.J. in the case already referred to, no exercise of the rulemaking power conferred by section 59 can over-ride ..... X X X X Extracts X X X X X X X X Extracts X X X X
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