Restrictive testamentary injunctions do not eliminate annual value for property tax; notional letting value can still be assessed.

Restrictive terms in a will preventing letting or occupation by anyone other than the priest and servants do not, by themselves, eliminate bona fide annual value under section 9(2) of the Income-tax Act, 1922. Property income under section 9 is assessed on the basis of the sum for which the property might reasonably be expected to let from year to year, so a restriction on actual letting may reduce the notional value but does not destroy the statutory concept of annual value or exclude the property from tax. The Tribunal was therefore wrong in holding that the premises had no letting value merely because of the testamentary injunction, and the issue was decided in favour of the Revenue.

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Issues: Whether premises restrained by a testamentary injunction against letting or occupation by persons other than the priest and servants could be said to have no bona fide annual value under section 9(2) of the Income-tax Act, 1922.

Analysis: Under section 9, income from property is assessed on the basis of its bona fide annual value, and that annual value is the sum for which the property might reasonably be expected to let from year to year. The existence of a restrictive clause may affect the quantum of letting value, but it does not, by itself, destroy the concept of annual value or eliminate the possibility of notional income. The statutory scheme taxes an artificially determined property income, and the owner's inability or restriction on actual letting does not by itself take the property outside the charge.

Conclusion: The Tribunal was wrong in holding that the premises had no letting value merely because of the injunction in the will. The question was answered in favour of the Revenue.

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