Urban land tax deduction allowed in full where payment was made in the relevant previous year and binding precedent governed the issue.

Urban land tax paid during the relevant previous year was held allowable in full as a deduction for the assessment year in question, including the portion attributable to earlier years, because the Tribunal's view followed an existing binding precedent of the same Court on the same issue. The court therefore answered the referred question in the affirmative and against the Department, and the assessee succeeded on the deduction claim.

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Issues: Whether urban land tax relating to earlier years was allowable as a deduction in computing the income of the previous year relevant to assessment year 1978-79.

Analysis: The tax liability had been paid during the relevant previous year, and the Tribunal's view that the entire amount was deductible was consistent with the earlier binding decision of the same Court on the same question.

Conclusion: The question was answered in the affirmative and against the Department, holding that the deduction of the entire urban land tax, including the amount relatable to earlier years, was allowable.

Final Conclusion: The assessee succeeded on the referred question, and the revenue's challenge failed.

Ratio Decidendi: Where a tax liability is paid in the relevant previous year and the issue is governed by an existing binding precedent, the full amount is allowable as a deduction for the assessment year in question.

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