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income-tax Officer Vs. Smt. P. Kamalam Amma - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Cochin
Decided On
Judge
Reported in(1984)8ITD508(Coch.)
Appellantincome-tax Officer
RespondentSmt. P. Kamalam Amma
Excerpt:
.....it will not, therefore, be proper to rely upon the nature of the deductions detailed in the other clauses. the expression occurs in clause (vii) and the argument can in any case be advanced only with regard to the portion occurring before the expression in clause (vii). this portion refers to 'any sums paid on account of land revenue'. the expression 'or any other tax levied by the state government' was introduced by way of an amendment. in our view the earlier portion of the clause does not constitute sufficient genus for the application of the rule of construction of ejusdem generis. as rightly pointed out by the learned representative for the assessee, nothing prevented the legislature from qualifying the expression 'any other tax' by the words 'annual' or 'recurring'. the expression.....
Judgment:
1. These are appeals by the department relating to the assessment years 1979-80 and 1980-81, for which the accounting periods ended on 31-3-1979 and 31-3-1980, respectively. The grounds taken in the two appeals are common and are to the effect that the AAC erred in holding that the tax paid on the capital value of a new building under the Kerala Buildings Tax Act, 1975, is an admissible deduction under Section 24(1)(vii) of the Income-tax Act, 1961 ('the Act') for computing the income from property.

2. For the two assessment years under appeal, the assessee paid Rs. 1,651 each as building tax under the Kerala Buildings Tax Act, The assessee claimed deduction of the amount under Section 24(1)(vii) in computing the income from house property. The claim was rejected by the ITO on the ground that the building tax is a capital levy arid is not, therefore, an allowable deduction. The AAC held that the building tax would fall under the expression 'or any other tax levied by the State Government in respect of the property' occurring in Clause (vii) of Section 24(1). Aggrieved by the same the department has come up in appeal, (viz) any sums paid on account of land revenue or any other tax levied by the State Government in respect of the property;" The first contention advanced by the learned departmental representative was that the Tribunal has in its order dated 8-3-1982, in the case of Hotel Karthika [IT Appeal No. 411 (Coch.) of 1980] held that the building tax is a capital levy forming part of the cost of construction and that in the light of this ruling, the claim of the assessee is untenable. In that case, the claim that came up for consideration before the Tribunal was for deduction of the building tax as business expenditure under Section 37(1) of the Act by the owner of a hotel. It was held by the Tribunal that what is allowable under Section 37 as a deduction is only such expenditure as is laid out or expended wholly and exclusively for the purpose of the business and not being in the nature of capital expenditure or personal expenses of the assessee and that the building tax paid by the assessee was not laid out or expended wholly and exclusively for the purpose of the business and that it can only be treated as part of the construction cost on the analogy that licence fee and such other expenses also go into the investment in the acquisition of the asset in the form of the building.

4. The position in the present case is entirely different as the claim is one for deduction under Section 24(1)(vii) by the owner of the building. In this connection, it may be noted ihat the AAC has held that Section 24(1) (vii) does not make any distinction between capital levy or revenue levy. We fully agree with this observation. Therefore, the finding in the decision of the Tribunal referred to above that the tax is in the form of a capital levy does not affect the claim of the assessee.

5. There is no dispute about the fact that the levy under the Kerala Buildings Tax Act was a single levy. It is explained that there is provision to pay the tax in instalments and that this is the reason for the payment of two identical amounts in the two assessment years under appeal.

6. It was then contended by the learned departmental representative that the claim has to fail if Clause (vii) is interpreted by applying the rule of ejusdem generis. The argument was that the deductions in Section 24(1) relate to recurring payments and that by applying the rule of ejusdem generis the expression 'any other tax levied by the State Government in respect of the property' must be intended to cover only similar recurring payments as are dealt with in the other clauses of Section 24(1). it is to be noted at the outset that the expression, 'or any other tax levied by the State Government in respect of the property' does not occur as a residuary clause after the other clauses in Sub-section (1). It will not, therefore, be proper to rely upon the nature of the deductions detailed in the other clauses. The expression occurs in Clause (vii) and the argument can in any case be advanced only with regard to the portion occurring before the expression in Clause (vii). This portion refers to 'any sums paid on account of land revenue'. The expression 'or any other tax levied by the State Government' was introduced by way of an amendment. In our view the earlier portion of the clause does not constitute sufficient genus for the application of the rule of construction of ejusdem generis. As rightly pointed out by the learned representative for the assessee, nothing prevented the Legislature from qualifying the expression 'any other tax' by the words 'annual' or 'recurring'. The expression 'annual charge' has been used in Clause (iv) and no such qualifying words have been introduced in Clause (viz). The word 'any' is a word which ordinarily excludes limitation or quantification and it should be given as wide a construction as possible unless, of course, there is any indication in the subject-matter of the context to limit or qualify the ordinary wide construction of the word vide CIT v. R.M. Amin [1971] 82 ITR 194, 201 (Guj). On a plain reading of the clause, it appears to us that the intention of the Legislature in introducing the words 'or any other tax levied by the State Government' must have been to allow the deduction of all taxes imposed by the State Government on the building.

We find no justification to hold that the expression covers only a recurring levy.

7. The learned departmental representative also relied upon paragraph 29 of the memorandum explaining the provisions of the relevant Finance Bill, 1968, available at [1967] 67 ITR (St.) 80. After stating that it has been decided to allow deduction of the whole of the taxes levied by the local authority, regardless of the date of completion of the construction, it is stated: "Further, it is proposed to provide that any tax levied by the State Government in respect of the property (e.g., the urban land tax levied in Madras) will be allowable as a deduction in computing the income from house property." It was pointed out that the tax levied in Madras State was a recurring levy. We are not impressed with this argument as the Madras levy was only cited as an example and it is insufficient, in our opinion, to hold that the intention was to exclude only a recurring levy.

8. In view of what is staled above, we find no reason to interfere with the order of the AAC.


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