Statutory annual value governs property income taxation even where property is occupied rent-free under a will.

For income from property, section 9 of the Indian Income-tax Act taxed the bona fide annual value as statutory income, not actual rent received. The owner's inability to let the property or realise rent did not reduce liability where the statute deemed annual value to be income. Section 41 did not assist the trustees because they held the property in the same manner as the beneficiaries, and the rate of tax was a separate question. Accordingly, rent-free occupation under the terms of the will did not displace the statutory method of computation, and the annual value was includible in the trustees' assessment.

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Issues: Whether the annual value of property occupied rent-free under the terms of a will is includible in the assessee-trustees' assessment under section 9 of the Indian Income-tax Act.

Analysis: The charging scheme of the Indian Income-tax Act taxes total income computed in the manner laid down by the Act. In the case of income from property, section 9 does not proceed on actual receipt of rent but on the bona fide annual value, which is an artificial or statutory measure of income. The owner's inability to let the property or to realise rent does not affect liability where the statute deems the annual value to be income. Section 41 did not assist the trustees because the trustees, as holders of the property, remained liable in the same manner as the beneficiaries, and the rate of tax was a separate matter. The rent-free occupation created by the will did not displace the statutory method of computation.

Conclusion: The annual value of the property was rightly included in the assessment under section 9, and the answer to the reference was in the affirmative.

Ratio Decidendi: For income from property, the Indian Income-tax Act taxes the bona fide annual value as statutory income, irrespective of actual receipt of rent or the owner's inability to let the property.

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