HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
The New Piecegoods Bazar Co. Ltd., Bombay v. Commissioner of Income-tax, Bombay
Civil Appeal No. LXVI (66) of 1949
[1950] SCR 553 ·
Indian Income-tax Act 1922, section 9(1)(iv) · City of Bombay Municipal Act 1888, sections 143,146,154,156,167,197,212 · Bombay Finance Act 1932, sections 22,24(2)(b)
Sources & disclosures includedDownload original judgment / order
Four-judge bench · Saiyid Fazl Ali J. · M. Patanjali Sastri J. · Mehr Chand Mahajan J. · B.K. Mukherjea J.
Assessment years: 1940-41
01 · Facts of the case
An investment company earning Bombay property income claimed deductions of Rs 1,22,675 municipal property tax and Rs 32,760 urban immovable property tax for AY 1940-41. Apart from Rs 48,572 treated as tenants’ burdens, the claims were refused; its appeals failed and the Bombay High Court answered the referred questions against it. Only two questions concerning these taxes were pursued before the Supreme Court.
02 · Discussion by the Hon’ble Court
In the historical section 9(1)(iv), a capital charge meant a charge securing a capital liability, not every charge upon capital property. An annual charge secured an annual liability. Both Bombay taxes were recurring annual levies secured on the property; half-yearly collection did not change their nature. Their variable amounts did not prevent annual character. Separate express treatment of land revenue and business deductions did not justify excluding taxes falling within this clause.
03 · Judicial decision
The company’s appeal was allowed with costs and both relevant referred questions answered affirmatively. The Court approved the Allahabad reasoning in the connected Gappumal matter.
Source: Primary report: SCR 563 / PDF 11
04 · Outcome / in whose favour
Assessee: municipal property tax and urban immovable property tax deductible under the historical annual-charge clause.
Source: Primary report: SCR 563 / PDF 11
05 · AKHB REVIEW POINT
Distinguish a liability of capital character from a recurring charge merely secured on immovable property. Check the particular charging statute and period; the Court expressly recognised that municipal-tax laws differ. Do not transplant this superseded wording automatically into current house-property computation.
Source & verification
Download original judgment / order · Open cited source rendition
PDF 1 begins with a prior unrelated judgment ending, excluded. New Piecegoods caption/headnote then begins; judicial text PDF 2–11 ends before the Gappumal caption/headnote later on PDF 11, excluded.
Statutory scope
Historical section 9(1)(iv), including 1939 amendment, and AY 1940-41; no present-law or subsequent-treatment clearance.
Later treatment
Source checked 2026-10-18. Historical judgment; later treatment and current-law applicability have not been comprehensively checked.
Page references identify the supplied PDF; paragraph references identify the judgment unless stated otherwise.
Related reviewed notes
AI disclosure & professional disclaimer
This AKHB research note was prepared with AI assistance from an identified primary report. Independent human review is not represented.
General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. The AKHB REVIEW POINT is editorial analysis, not the Court’s holding. No current-law clearance is claimed.