TaxTMI 
TaxTMI 
1932 (7) TMI 16
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....Calcutta Municipal Act 1923. This Act, by the opening word of Section 149, thereof provides: One half of the consolidated rate shall be payable by the owners of the lands and buildings and the other half of the occupiers thereof. 2. The assessees's income from these properties is assessable to Income Tax under the head "property" in the manner prescribed by Section 9 of the Act (11 of 1922). In their return of income for the year of assessment 1930 the assessees put down the figure Rs. 48,000 as the annual value of the properties. The Income Tax authorities finding that in the year of account the tenant in addition to the rent paid to the owner paid to the Calcutta Corporation Rs. 8,288 in respect of the owner's sh....
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.... question to be answered. We must treat it as a question of law and the only answer which a Court of law can give is that one-half of the rate is imposed on the owner and is a liability of the owner. If by the covenants in the lease the discharge of this liability is undertaken by the tenant, this is part of the consideration obtained from the tenant by the owner. If the owner's share of the rate in respect of a house is Rs. 30 it can make no difference for purposes of Income Tax, whether the annual rent reserved is Rs. 4,030 without any special stipulation about payment of rates or whether the rent reserved is Rs. 4,000 with a stipulation that the tenant shall in addition pay the owner's share of the rate. In neither case is the bo....
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.... to contend that because when the tenant pays the landlord's tax the sum paid is not part of the landlord's " profits," this term of the bargain can have no bearing when the bargain is being considered as evidence (for what it is worth) of the annual value. This consideration appears to me to be in itself an answer to part of the reasoning of the majority of the Judges who decided the case of Chunna Lal v. Commissioner of Income Tax (1). The annual value as defined by Sub-section 2, Section 9, is a hypothetical sum and it is quite possible that the actual consideration paid or stipulated for by the parties in any individual case may be out of all relation to this sum, or much inferior as evidence thereof, to the evidence afforded by....
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....ustified by the general level of rents in order to avoid disturbance or for some other reason. In the case last mentioned upon proof of the facts, the additional sum would be shown to have no bearing on the annual value< but the prima facie conclusion from the additional payment would have been otherwise had it not been negatived by the proof. I respectfully disagree with the decision of the majority of the Full Bench of the Lahore High Court in the case referred to. 5. The assessees in the case before us found an argument upon the terms of Section 151, Calcutta Municipal Act 1923, which deals with unoccupied property. Its broad effect is to provide that one-half of the owner's share of the rate shall be remitted for the period durin....