Property income deduction for urban immovable property tax fails where the charge is not annual and is distinct from land revenue.

Urban immovable property tax paid under the Bombay Finance Act was examined for deductibility in computing property income under the Income-tax Act, 1922. The tax was not treated as an annual charge under section 9(1)(iv) because the statutory charge under section 24-B of the Bombay Finance Act, 1932 arose only on default and was not a charge on the property for every year. It also did not qualify as land revenue under section 9(1)(v), since the Bombay legislation distinguished the tax from land revenue and made the charge subject to prior payment of land revenue, if any. The deduction claim therefore failed.

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Issues: Whether urban immovable property tax paid under the Bombay Finance Act was deductible while computing income from property under Section 9 of the Income-tax Act, either as an annual charge under clause (iv) or as land revenue under clause (v).

Analysis: The deduction claim was examined under Section 9(1)(iv) and Section 9(1)(v) of the Income-tax Act, 1922. The urban immovable property tax was not treated as an annual charge within clause (iv) because the charge created by Section 24-B of the Bombay Finance Act, 1932 arose only on default and was not an annual charge on the property. The tax also did not amount to land revenue within clause (v), since the Bombay legislation itself distinguished the urban immovable property tax from land revenue by making the charge subject to prior payment of land revenue, if any.

Conclusion: The tax was not deductible under either clause and no deduction was allowable.

Final Conclusion: The reference was answered against the assessee, and the claim for deduction of urban immovable property tax failed.

Ratio Decidendi: A statutory charge arising on default in payment of a property tax is not an annual charge for purposes of property-income deduction, and a tax expressly distinguished from land revenue cannot be deducted as land revenue under the Income-tax Act.

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