MITSUI STEAMSHIP CO. LTD. vs C.I.T. WEST BENGAL, II CALCUTTA

The Supreme Court held that under Section 10(2)(xv) of the Indian Income-tax Act, 1922, and Section 40(ii)(a) of the Income-tax Act, 1961, the tax paid by an owner-cum-trader on business assets is deductible if it is incidental to the carrying on of business. The Court clarified that the amendments introduced by the Income-tax Amendment Act, 1972, do not affect the principle established in Indian Aluminum Co. Ltd. v. C.I.T., which allows deductions for taxes other than wealth tax. The appeal was allowed, affirming that municipal property tax in Japan is deductible as a business expense.