Enforceable annual charge on property qualifies as deductible property income allowance, even when supported by natural love and affection.

A recurring payment imposed by registered and legally enforceable indentures was treated as a valid annual charge on property, because the assessees were bound to make the yearly payment and it was not a mere voluntary application of income. The absence of pecuniary consideration did not defeat the arrangement, as natural love and affection could support the obligation under contract law. The payment therefore fell within the property-income deduction provision and was deductible from property income.

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Issues: Whether the yearly payment of Rs. 6,000 undertaken by the assessees under registered and enforceable indentures in favour of their mother constituted an annual charge deductible under Section 9(1)(iv) of the Indian Income-tax Act, 1922.

Analysis: Section 9(1)(iv) permits allowance in respect of a valid annual charge on property. The decisive test is whether the property is subject to a legal and enforceable charge under which the assessee is bound to make a recurring annual payment. The payment here was embodied in written and registered instruments, was enforceable in law, and the absence of pecuniary consideration did not prevent the arrangement from being supported by natural love and affection, which is sufficient consideration under Section 25(1) of the Indian Contract Act, 1872. The payment was therefore not to be treated as a mere voluntary application of income but as a charge attached to the property.

Conclusion: The sum of Rs. 6,000 payable annually by each assessee was a permissible allowance under Section 9(1)(iv) and was deductible from property income.

Final Conclusion: The reference was answered in favour of the assessees, and the disputed annual payment was held deductible as a legally enforceable charge on property.

Ratio Decidendi: A recurring payment secured by a valid and enforceable charge on property qualifies as an annual charge deductible under the property-income provision, even if created without pecuniary consideration but supported by natural love and affection.

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