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TMI Blog1957 (9) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... , who owns several properties most of which are in the City of Nagpur, and the matter was dealt with by the Income Tax authorities and by the Tribunal on the footing that all properties were in Nagpur. The income from property was computed under section 9 of the Income Tax Act for the year of account ending with 31st May, 1950. The assessee's gross receipts amounted to ₹ 1,00,840. This sum included property tax ₹ 4,720, water rate ₹ 6,480 and conservancy tax ₹ 3,568 making a total of ₹ 14,769, which were separately credited in the books of account of the assessee. The Income Tax Officer, relying upon the third proviso to section 9, sub-section (2), computed the assessee's income from property by taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expected to let from year to year." And the third proviso to this sub-section read : "Provided further that where the property is in the occupation of a tenant and the taxes levied by any local authority in respect of the property are, under the law authorising such levy, payable wholly by the owner or partly by the owner and partly by the tenant - (a) one-half of the total amount of such taxes shall, notwithstanding anything contained in such law, be deemed to be the tenant's liability for such taxes." 4. Therefore, reading these relevant provisions of the law, it is quite clear that tax "in respect of property" can be deducted from the annual value only to the extent provided in the third proviso to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence it will not be necessary for us to determine the exact scope of the words "in respect of the property" used in the third proviso to section 9(2) ; but we are certainly not prepared to accept the very wide proposition canvassed for by Mr. Palkhiwala that the words do not mean anything more than a property tax. A property tax was well known and has been well known in this country for very many years; and merely as a matter of legislative history the proviso was put in order to get over a judicial decision that a property tax had to be deducted from the annual values. Therefore in using the words "tax in respect of the property" instead of the words "property tax," the Legislature could not have intended that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regard to the water rate, the words in the Act are "where water is supplied" and, therefore, if the Corporation does not supply water, there can be no water rate. Here again, there is a service directly rendered and it is for that service that the rate is imposed. Then turning to the rules made for the purpose of imposing these taxes which are the rules which were made under the Central Provinces and Berar Municipalities Act, 1922, which was repealed by the City of Nagpur Corporation Act, 1948, but the rules made under which have been preserved in force by section 3(2) of the City of Nagpur Corporation Act, rule 2(ii) provides for the imposition of a conservancy tax "on every building or land to which a private latrine, pri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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