COMMISSIONER OF INCOME-TAX CALCUTTA vs DALHOUSIE PROPERTIES LTD.

The Supreme Court, while adjudicating the Special Leave Petition under Article 136, upheld the decision of the Calcutta High Court regarding the deduction of municipal taxes under Section 23(1) of the Income-tax Act, 1961. The Court affirmed that the Income-tax Appellate Tribunal was correct in allowing the full amount of Rs. 1,78,784 as a deductible item, despite the assessee's dispute over the liability. The ruling clarified that the deduction is permissible irrespective of the actual payment status of the taxes levied by the Corporation of Calcutta.