1. V. V. KAMAT, J.---The question in this reference is as to whether the payment of building tax by the assessee could be considered as business income or capital expenditure. This appears before us with regard to the assessm ent year 1985-86 in the context of the assessee who is running a tourist home and a bar at Thodupuzha. He paid an amount of Rs.81,955 towards payment of building tax and claimed deduction contending that it is business income. This was not allowed by all the three authorities. The Tribunal relied on its own decision in I.T.A. No. 578/Cock. Of 1986, dated November 29-1991.
2. The questions that come up for consideration are as follows: "(1) Whether, on the facts and in the circumstances of the case, the payment of building tax of Rs.81,955 by the assessee could be considered as payment in the character of a trader-cum- owner?
(2) Whether, on the facts and in the circumstances of the case, the sum of Rs.81,955 paid by the assessee as building tax was legally deductible as a business expenditure in computing the assessee's income from business?
(3) Whether, the building tax paid under section 5 of the Kerala Building Tax Act, 1975, is a tax on the capital value of the building or a tax levied with reference to the value of the asset?"
3. Question No. 1 is answered in the negative--in favour of the Revenue and against the assessee.
4. Question No. 2 is also answered in the negative---in favour of the Revenue and against the assessee. Question No. 3 is answered in the affirmative that the. Building tax is on the capital value of the building and levied with reference to the value of the asset---in favour of the Revenue and against the assessee.
5. A copy of this judgment under the seal of this Court and the. Signature of the Registrar shall be forwarded to the Income-tax Appellate Tribunal, Cochin Bench, for passing consequential orders.