1993 (8) TMI 27

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....owance of municipal tax which was a mistake apparent from the record?" The assessee-company is assessed to income-tax under the heads "Income from house property" and "Income from other sources". This reference relates to the income-tax assessment of the assessee-company for the assessment years 1978-79 and 1979-80. In respect of those two years, the assessee-company was originally allowed deduction in respect of municipal taxes in computing its income under the head "Income from house property" in the sums of Rs. 4,11,352 and Rs. 4,16,537, respectively. Subsequently, the Income-tax Officer issued notice under section 154 of the Income-tax Act, 1961, and sought to rectify the deduction allowed in respect of municipal taxes by substitutin....

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.... the said two years. On further appeal by the Revenue, the Tribunal held and observed that two views were possible on the question whether the municipal tax should be allowed on the basis of what was actually levied in the relevant previous year or with reference to the amount which is finally determined by the municipal tax authorities for the relevant year. The Tribunal referred to the decision of the Supreme Court in the case of T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50 and held that a mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions and that a decision on a debatabl....

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....true that the expression "borne" means the amount of tax which the owner is liable to discharge in respect of the municipal tax. The expression "annual value" is a notional figure under section 23 of the said Act and this figure does not refer to any actual receipt. It is arrived at by deducting taxes levied by a local authority, for paying which the owner has assumed the responsibility, from the sum for which the property might reasonably be expected to be let from year to year. It is reasonable to treat the annual value of a house property as remaining more or less constant during the entire period covered by any given previous year except perhaps where the tax liability itself is modified by the local authority concerned. In order to ens....