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TMI Blog2005 (2) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... lowable business expenditure under section 30(b) of the Income-tax Act, 1961?" The applicant claimed a sum of Rs. 1,98,609 paid as building tax under the Kerala Building Tax Act as allowable business expenditure. The assessing authority did not accept the claim and took the view that the building tax paid under the Kerala Building Tax Act was incurred for bringing a capital asset into existence and is not an expenditure incurred for earning income. The assessee took up the matter before the Commissioner of Income-tax (Appeals) who held that the building tax is allowable under section 30(b) of the Income-tax Act as business expenditure. The Revenue aggrieved by the said order took up the matter in appeal before the Tribunal and the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's trade and hence such payment is a permissible deduction under section 10(2)(xv) of the Indian Income-tax Act. The court held that if the expenditure is laid out by the assessee as owner-cum-trader and the expenditure is really incidental to the carrying on of his business, it must be treated to have been laid out by him as a trader and is incidental to his business. The above mentioned decision would not apply so far as the question raised for consideration in this case. The Kerala Building Tax Act, 1975, provides for levy of tax on buildings. Section 5 of the Act is the charging provision by which tax shall be payable by the owner of the building on the construction of the building. It is not of a recurring nature. Payment of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally made an allowable deduction under section 30 (b) of the Act while there is no provision for allowing building tax which is a one time liability. Even though counsel for the assessee, relying on the decision of the apex court in Indian Aluminium Co.'s case [1972] 84 ITR 735, contended that building tax like wealth-tax is an allowable business expenditure under section 37(1) of the Income-tax Act, we are not inclined to accept the claim for more than one reason. In the first place we have held above that building tax is a capital expenditure and so much so it could not be allowed under section 37(1) of the Income-tax Act which provides for deduction of only revenue expenditure. Secondly unlike the 1922 Act, detailed provisions for deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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