Sabyasachi Mukharji, J.
1. The Tribunal has referred to this court the following two questions :
'1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount realised by the assessee from its tenants by way of occupiers' share of property tax did not form part of the sum for which the property might reasonably be expected to let from year to year within the meaning of Section 23(1) of the Income-tax Act, 1961, and the same was not of the character of income in the hands of the assessee ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal should have held that, in any case, the net excess collection of occupiers' share of the property tax from the tenants in excess of what was made over to the Municipal Corporation was liable to be assessed in the hands of the assessee ?'
2. The facts and circumstances have been set out in the statement of facts and the Tribunal in its order after considering the rival submissions observed as follows :
'We have given due consideration to their rival submissions and we are unable to agree with the contentions advanced by the learned departmental representative. We do not find any basis for his argument that the occupiers' share of tax collected by the assessee from the tenants partook of the character of rent receipt to the extent the assessee paid it to the Municipal Council and the character of service charges are charges to the extent of the balance service charges which are charges for the specific services rendered by the owner of the property to tenants such as provision for lift, watch and ward facilities. We fail to see how the tenants' share of tax, to the extent it was collected by the owner but not remitted to the Municipality, could be regarded as part of service charges. In our view the occupiers' share of tax was separate and distinct from rent and also from service charges. We are fortified in our view by the terms of the lease deed executed by one of the tenants, which was placed before us at the hearing of the appeal. It is the lease deed dated February (7) 1957, between the assessee as lessor and United India Fire & General Insurance Co. Ltd., as lessee. Under Clause 2(a) the lessee covenanted to pay the lessor the stipulated rent. Under Clause 2(b) the lessee covenanted to pay the lessor the stipulated service charges. Under Clause 2(c) it covenanted to pay, or reimburse the lessor for the payment of the occupiers' share of Municipal taxes or rates. This Clause 2(c) mainly gives effect to the statutory liability of occupiers under Section 191 of the Calcutta Municipal Act, 1951. It may thus be seen that under the terms of the lease the occupiers' share of tax which the tenant undertook to pay to the Municipal Corporation under Clause 2(c) was something separate and distinct from the rent and the service charges which the tenant undertook to pay to the owner under Clause 2(b) and Clause 2(c) respectively.
We do not find anything in Section 23(1) of the I.T. Act, 1961, to support the contention of the learned departmental representative that occupiers' share of the tax is a receipt of income character. It is true that a tenants' liability not borne by the owner was not liable to be deducted under the proviso to Section 23(1) in computing the annual value of the property and that a sum determined as the annual value of the property excluding the amount deductible under the proviso is of income character but a sumwhich does not go into the calculation of annual value at all under the main paragraph of Section 23(1) is not of revenue character at all. Under the main paragraph of Section 23(1) only the sum for which the property might reasonably be expected to let from year to year can be deemed to be the annual value of the property. Now, the amount which the tenant is statutorily liable to pay to the local authority as his share of the tax does not, in our view, form part of the sum for which the property might reasonably be expected to Jet from year to year. When a sum does not partake of the character of revenue under the main paragraph of Section 23(1), it cannot acquire that character merely because it is not deductible under the proviso below the main paragraph. A proviso cannot by implication enlarge the scope of the main provision. We are, therefore, of the view that the occupiers' share of the municipal tax, which a tenant is statutorily liable to pay to the Municipality, does not form part of the annual value as determined under the main paragraph of Section 23(1) and it does not acquire revenue character merely because the owner has not undertaken to bear the same and it is, therefore, not liable to be deducted under the proviso below the main paragraph.
The position of the assessee vis-a-vis the occupiers' share of tax collected by him is that of an agent or trustee. To the extent the assessee has not paid that amount to the Municipality, it may have to refund the same to the tenants from whom it was collected. But when that amount does not have the character of income in the hands of the assessee, it does not acquire such character merely because it has not been refunded to the respective tenants from whom it was collected. In this view of the matter, it is immaterial whether the whole of this sum of Rs. 42,683 or any part thereof represents excess collection of occupiers' share of tax. In any view of the matter, it is not liable to be treated as a receipt of revenue character. We, therefore, allow the assessee's claim and direct the exclusion of this sum of Rs. 42,683 from the assessee's total receipts.'
3. In view of the provision of law we are of the opinion that the Tribunal, in the facts and circumstances of the case, arrived at a correct conclusion and in that view of the matter the question No. 1 must be answered in the affirmative and in favour of the assessee and question No. 2 in the negative and also in favour of the assessee.
4. In the facts and circumstances of the case, the parties will pay and bear its own costs.
Suhas Chandra Sen, J.
5. I agree.