Law:

Section:

Section 24 of the Income-tax Act, 1961 – Income from house property – Deductions – Assessment years 1964-65 to 1968-69 – Whether urban land tax paid under Tamil Nadu Urban Land Tax Act, 1966, could not be regarded as same as land revenue and, hence, it was not allowable as deduction under section 24 – Held, yes FACTS The assessee, deriving income from property, claimed deduction of urban land tax payable under the 1966 Act. The ITO rejected the assessee's claim. The AAC confirmed the disallowance. The Tribunal however, accepted the claim of the assessee under section 24. On reference: HELD The phrase "in lieu of" used in section 23 of the 1966 Act clearly goes to show that the tax levied under that Act, is different from the tax payable under the Madras City Land Revenue Act, 1851, under which alone the assessee was, prior to the enactment of this 1966 Act, paying the land revenue to the Government. When one enactment substitutes the levy under another enactment, it follows that the substituted levy cannot be taken as the same as the levy which prevailed earlier. Otherwise, there will be no meaning in the substitution. If the two are not different, then appropriate provision would have been made in section 23 of the 1966 Act itself. Section 23 of the 1966 has the effect of abolishing land revenue as far as the urban lands are concerned and levying tax on the market value of such land. The two legislations are so wholly different that it is not possible to take the one, viz., the urban land tax, as equivalent to the land revenue for purposes of deduction under section 24(1)(vii). The land revenue represents only the share of the income of the Government from the land. But the tax levied in the instant case was on the capital or market value and, therefore, it could not be the same as land revenue. Therefore, the Tribunal was wrong in upholding the assessee's claim under section 24(1)(vii) Note : The case was decided against the assessee. CASES REFERRED TO Asstt. Commissioner of Urban Land Tax v. Buckingham & Carnatic Co. Ltd. [1970] 75 ITR 603 (SC), Gopalan v. State of Madras AIR 1958 Mad. 539, Raja Jagananth Baksh Singh v. State of U.P. AIR 1962 SC 1563,…

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