TaxTMI 
TaxTMI 
1945 (11) TMI 8
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....and also at Nalhati and Lohapur, two other villages there. In assessing the respondents to income-tax for the year 1940-41, on the basis of the previous year 1939-40, the Income-tax Officer assessed the total assessable income of the respondents as a Hindu undivided family at Rs. 17,250, in which he included a sum of Rs. 6,563, as being the profits of the Nalhati business assessable under Sections 6(iv) and 10(1) of the Act. The Income-tax Officer disallowed a claim by the respondents to deduct as an allowance authorised by Section 10(2) of the Act a sum of Rs. 84 paid by them as a union board rate in Nalhati under the provisions of the Bengal Village Self-Government Act, 1919. The respondents appealed under Section 30 against the order of ....
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.... of any business, profession or vocation carried on by him. (2) Such profits or gains shall be computed after making the following allowances, namely:- **** (ix) any sums paid on account of land revenue, local rates or municipal taxes in respect of such part of the premises as is used for the purposes of the business, profession or vocation; **** (xii) any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of such business, profession or vocation; **** (4) Nothing in clause (ix) or clause (xii) of sub-section (2) shall be deemed to authorise the allowance of any sum paid on account of any cess, rate or tax levied o....
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.... required, after deduction of the contribution, if any, made by the Provincial Government in this behalf, for the salaries and equipment of the defadars and chaukidars and the salaries of the establishment of the union board, and (b) the sum estimated to be required to meet the expenses of the board in carrying out any of the other purposes of this Act, if such estimate has been approved by more than half the total number of the members of the board at a meeting specially convened for the purpose, together with ten per cent. above such sums to meet the expenses of collections and the losses due to non-realisation of the rate from defaulters. Section 38. (1) The rate to be imposed by a union board under Section 37 shall be an assessmen....
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....months and a half before the first day of the year to which the budget relates, the union board at a meeting shall proceed to assess the union rate provided in the estimate according to the circumstances and the property within the union of the person liable to assessment: Provided that the said period may, for reasons to be recorded in writing, be at any time altered by the District Magistrate. (2) When a union board is for the first time constituted in any union it may assess the union rate for a portion of the year in which it is so constituted or of the year next following. RULE 2. The union board shall first prepare, village by village and in Form No. 1, a list of all persons owning or occupying buildings, whether with or with....
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....board in the manner laid down in rule 6, if possible before the first day of the year, and if not, as soon as possible thereafter. RULE 11. If any person mentioned in the assessment list ceases at any time after the publication thereof under rule 10 to occupy any building in respect of the occupation of which he has been assessed, or if the means and property in respect of which he has been so assessed are reduced, the union board at a meeting may exempt him from assessment or revise the same; and such exemption or revision shall take effect from such date as the board may direct." It is clear that the rate is only imposed on persons who are owners or occupiers or owners and occupiers of buildings within the union, but, in arriving at....
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....come- tax Act. It is conceded that the union rate is not "levied on the profits or gains," which clearly implies an ascertainment of such profits and gains, and the words "assessed.........on the basis of any such profits or gains" in the later part of the sub-section must also be so limited. No such ascertainment of the profits and gains of the business can be undertaken for the purposes of the union rate. The main argument for the Crown therefore fails. Turning now to head (ix) of sub-section (2) of Section 10 of the Income-tax Act, the argument for the Crown proceeded on a somewhat meticulous examination of the statement of the case, and the papers in the index which are made part of the reference, in order to show that the respondent....