SOUTHERN INDIA TEA ESTATES COMPANY LIMITED Vs. COMMISSIONER OF INCOME TAX
HIGH COURT OF KERALA
SOUTHERN INDIA TEA ESTATES CO. LTD., ALLEPPEY
COMMISSIONER OF INCOME-TAX, KERALA, ERNAKULAM
Referred Judgements :-
STRONG AND CO. LTD. V. WOODLFILED
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(1.)This is a reference by the Income Tax Appellate Tribunal, Madras Bench, under S.66(1) of the Indian Income Tax Act, 1922. The assessment year concerned is 1960-61; and the accounting period, the twelve months ended 29-2-1960. The question referred is:
"Whether on the facts and circumstances of the case, the assessee company is entitled to a deduction of Rs. 12,873/- being the wealth tax paid during the account year ended 29-2-1960, against the profits and gains of its business for the assessment year 1961-61 under S.10(2)(xv) of the Indian Income Tax Act -
(2.)The liability to pay wealth tax arises from the Wealth Tax Act, 1957. The substantive provisions of that Act are S.3 to 7. Of these, S.3 is the charging section. It follows closely the language adopted for the charge of income tax in S.3 of. the Indian Income Tax Act, 1922, and reads as follows:
"Subject to the other provisions contained in this Act, there shall be charged for every financial year commencing on and from the first day of April, 1957, a tax hereinafter referred to as wealth tax in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in the Schedule."
(3.)According to Sampath Iyengar's commentary on the Wealth Tax Act, 1957, the wealth tax paid under that Act is not a deductible item. He says:
"S.12(1) of the Excess Profits Tax Act, 1940, and S.10 of the Business Profits Tax Act, 1947, authorise the deduction of the amount of excess profits tax and business profits tax in the computation of the 'total income' for the purposes of the Income Tax Act. A similar provision is lacking in this Act. In consequence, no deduction is permissible in respect of wealth tax paid, in calculating 'total income' for the purpose of the Income Tax Act." (The Three New Taxes, Page 10)
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