This appeal has been filed by assessee against order dated 30-3- 1985 of Commissioner (Appeals) relating to assessment year 1982-83. 2. assessee is limited company deriving income from house properties and business. It may be stated that assessee was deriving income by way of rent as well as service charges in respect of properties let out by it. We are told that in earlier year Tribunal had held that service charges could be estimated at one-fourth on gross rentals received by assessee and that such service charges were not liable to be taxed under head 'Income from house property', but under head 'Profits and gains of business o r profession'. This fact is borne out by Annexures and D to assessment order passed by ITO wherein he has taken away one-fourth of gross rentals from head 'Income from house property' to head 'Profits and gains of business or profession'. 3. only ground pressed in this appeal is that assessee's claim for deducting interest of Rs. 58,179 which assessee was called upon to pay by Calcutta Municipal Corporation as interest on unpaid bills should have been allowed as deduction either while computing income under head 'Income from house property' or under head 'Profits and gains of business or profession'. This sum of Rs. 58,179 related to unpaid admitted municipal tax for several earlier years. Shri C. R. Sen, learned representative for assessee, explained before us that assessee did not pay even admitted tax of earlier years because taxes were clubbed together with enhancements claimed by municipal corporation and assessee was agitating imposition of enhanced tax. He stated that demand notice relating to tax of earlier years (both admitted and disputed) together with interest at prescribed rate was received by assessee on 13-8-1981 which was within previous year under consideration. Hence, assessee had to make provision for interest of Rs. 58,179 which was attributable only to undisputed portion of tax that had remained unpaid, till receipt of demand notice. assessee claimed that this interest which has accrued on unpaid municipal tax became part of tax itself and so it should have been allowed. ITO and Commissioner (Appeals) rejected claim of assessee. They held that interest is quite different from tax and there is no provision in Income-tax Act, 1961 ('the Act') for allowing interest on unpaid municipal tax while computing income under head 'Income from house property' in accordance with provisions of sections 22 to 24 of Act. 4. Shri C. R. Sen urged before us that revenue authorities erred in their decision. He referred to decision in case of Mahalakshmi Sugar Mills Co. v. CIT [1980] 123 ITR 429 (SC) for proposition that interest payable on arrears of cess constituted accretion to cess. Extending that analogy to facts of present case, Shri C. R. Sen urged that interest paid on arrear or municipal tax also became accrued that interest paid on arrear or municipal tax also became accretion to municipal tax and became part of it. Consequently, he urged that same was admissible as deduction under section 23(1). Next, he urged that it has been held in case of CIT v. Dalhousie Properties Ltd. [1984] 149 ITR 708 (SC) that municipal tax has to be allowed even if it is not paid computing income from let out houses. His point was that claim of assessee cannot be denied merely on ground that taxes related to earlier years. Next, he urged that at least 25 per cent of aforesaid sum of Rs. 58,179 should have been allowed as deduction while computing business income as one-fourth of gross rentals has been treated as business income. 5. Shri P. Thiagarajan, learned representative for department, supported orders of revenue authorities. He stated that there is no provision under Act to deduct interest while computing property income. provisions relating to computing of income from property are exhaustive and do not permit of allowing any interest on unpaid taxes. Regarding case of Mahalakshmi Sugar Mills Co. (supra), he stated that said case was not direct authority on point. Hence, he urged that decision of Commissioner (Appeals) deserved to be upheld. 6. We have considered contentions parties as well as facts on record. At outset, we may say that case of Mahalakshmi Sugar Mills Co. (supra) is indeed not real authority on issue raised before us. In that case, interest on unpaid cess was disallowed while computing business income of assessee on ground that non-payment of statutory cess amounted to infringement of law. Hon'ble Supreme Court considered matter and observed that relevant Act provided penalty for non-payment of cess separately and so interest charged for non-payment of cess represented merely compensation for withholding amounts due to Government and that it did not represent any penalty for infringement of any law. In instant case, we are not concerned with computation of business income or question as to whether interest was or was not paid for infringement of any law. Hence, we are unable to apply ratio of said reported case to facts of instant case. Besides, we find that Tribunal had occasion to consider this matter in its order dated 23-6-1986 in IT Appeal Nos. 1608 and 1609 (Cal.) of 1985. In that case question which arose before Tribunal was as to whether interest paid by assessee on unpaid municipal tax was nothing but part of tax itself and so was deductible while computing annual value of property. Tribunal, after considering relevant law and decided cases, came to conclusion that interest was entirely different from part of tax envisaged under section 23 and that said interest did not form part of tax and so was not deductible while computing property income. We are in respectful agreement with aforesaid reasoning and conclusion of Tribunal especially in view of following observations of Hon'ble Madras High Court in case of CIT v. L. G. Ramamurthy [1977] 110 ITR 453: "It is worthwhile emphasising that if Bench of Tribunal on identical facts as allowed to come to conclusion directly opposed to conclusion reached by another Bench of Tribunal on earlier occasion, that will be destructive of institutional integrity itself ...." (p. 467) In view of above reasons, we are unable to accept this contention raised for assessee and so we reject same. 7. However, we find force in alternative contention raised for assessee to effect that at least 25 per cent of aforesaid interest of Rs. 58,179 amounting to Rs. 14,545 should have been allowed while computing business income. As stated earlier, ITO has treated one-fourth of gross rentals as assessable under head 'Profits and gains of business or profession' (vide Annexures and D of assessment order). This has been done by ITO in accordance with decision of Tribunal in earlier year. As one-fourth of gross rentals has been apportioned towards business income, it is reasonable to hold that one-fourth of expense in form of interest under consideration should also be apportioned towards said business. interest relates to unpaid municipal tax relatable to same buildings from which service charges were earned. Hence, we direct that sum of Rs. 10,545 be allowed as deduction while computing business income from service charges as computed in Annexure D to assessment order and assessment be modified accordingly. No other ground was pressed before us. 8. In result, total income of assessee is reduced by sum of Rs. 14,545, and appeal is partly allowed. *** MRINALINI PROPERTIES & MERCANTILE CO.(P) LTD. v. INCOME TAX OFFICER