| Case ID |
0bc39db2-5bdb-42f4-be78-74f8f2c3e1e9 |
| Body |
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| Case Number |
IT REFERENCE No. 573 OF 1971 |
| Decision Date |
Apr 21, 1978 |
| Hearing Date |
|
| Decision |
The Tribunal was correct in allowing the full taxes levied by the Corporation to be deducted under section 23(1) of the Income-tax Act, 1961. The assessee was entitled to claim the entire amount of Rs. 1,78,784 as a deductible item in the computation of its income derived from house property. The court emphasized that the liability to pay taxes was that of the assessee and not that of its tenants, thus supporting the view that taxes levied by a local authority should be allowed regardless of whether they were disputed or paid. |
| Summary |
This case revolves around the interpretation of section 23(1) of the Income-tax Act, 1961, specifically regarding the deductibility of taxes levied by local authorities. The Calcutta High Court addressed whether the full amount of taxes claimed by the assessee, Dalhousie Properties Ltd., could be deducted from its rental income for the assessment year 1966-67. The court found that the Income Tax Officer (ITO) had initially allowed only a portion of the claimed amount due to disputes over enhanced taxes. However, upon appeal, the Tribunal ruled that the entire amount should be allowed, leading to a reference for legal clarification. The court ultimately upheld the Tribunal's decision, reinforcing the principle that the liability to pay taxes lies with the property owner and not with tenants, thereby allowing the full deduction. This case highlights the importance of understanding tax liabilities in property income assessments, making it a significant reference for future cases involving local authority tax deductions. |
| Court |
Calcutta High Court
|
| Entities Involved |
Dalhousie Properties Ltd.,
Corporation of Calcutta
|
| Judges |
Dipak Kumar Sen,
C.K. Banerji
|
| Lawyers |
Mr. B. L. Pal,
Dr. Debi Pal
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Dalhousie Properties Ltd.
|
| Citations |
1979 SLD 800,
(1979) 116 ITR 289
|
| Other Citations |
Budd. v. Marshall [1880] 50 L.J. QB 24 (CA)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
23(1)
|