COMMISSIONER OF INCOME-TAX, U.P. vs GAPPUMAL KANHAIYA LAL

The Supreme Court held that the house-tax and water-tax imposed by the municipal board under Section 128 of the U.P. Municipalities Act, 1916, are 'annual charges not being capital charges' as per Section 9(1)(iv) of the Indian Income-tax Act, 1922. These taxes should be deducted from the bona fide annual value of the property for income tax assessment. The Court affirmed the judgment of the Allahabad High Court, which had ruled in favor of the deduction of these taxes.