JUDGMENT Braund and Yorke, JJ. - This is a reference to us made by the Additional District Magistrate, Meerut, u/s 16(1) of the United Provinces Municipalities Act, 1916: It would appear that the Upper Jumna Valley Electricity Supply Company Limited, which carries on its operations in part within the Notified Area both of Baghpat and Mowana, has been assessed by the Committees of those two areas respectively to certain sums for the years 1939 and 1940 in respect of what is known as "circumstances and property tax". On appeal from that assessment to the District Magistrate, the latter felt himself in some doubt on a question of principle and has referred it to us. Put shortly, the matter which perplexed him was whether the income of the Assessee on which the "circumstances and property" tax ought to be assessed was the net income or the gloss income for the years in question. 2. This so-called "circumstances and property tax" is not a very pleasing thing and has been subject of more than one judicial comment. It seems to arise u/s 128 of the Municipalities Act of 1916 which gave power to a Municipal Board (in which for the present purpose may be included a Notified Area Committee) to impose taxes of certain specified kinds one of which--No. 9--was "a tax on inhabitants assessed according to their circumstances and property". It is almost impossible to imagine a more vague expression than that. 3. We are not concerned at the moment to make any comments on the validity of the tax which has been imposed in the case and we content ourselves with drawing attention to the actual notification of June 28, 1919, which in the case of the Notified Area of Mowana actually imposed the tax. It was imposed in these words, a tax on all persons residing or carrying on any trade, calling or vocation or owning property within the notified area of Mowana is to be levied according to their circumstances and property.... 4. Then follows an Explanation to the effect that the word "person" is to include a firm, company, or association and finally it was provided that "the rate of assessment" should be on a sliding scale adjusted and assessed on the "income" of the Assessee. 4. Then follows an Explanation to the effect that the word "person" is to include a firm, company, or association and finally it was provided that "the rate of assessment" should be on a sliding scale adjusted and assessed on the "income" of the Assessee. We assume that what was meant was the "annual income of the Assessee" though it is not in terms actually so said. The result appears to be that the tax, which was actually imposed according to the machinery for imposing it provided by the Municipalities Act, was a tax which had to be assessed by virtue of a reference to the Assessee's "income". We point out, therefore, that the charging provision imposing the taxation does so impose a charge on "income" and on nothing else. In the case of the charge of the tax so far as the Notified Area of Baghpat is concerned, it is imposed by a notification in language which does not, for any material purposes, differ from the language in the case of Mowana. 5. By Section 153, read with Section 296 of the Municipalities Act, the Local Government was given certain powers to make rules, among other things, to provide for the assessment, collection and composition of taxes imposed under the Municipalities Act, In the case of Mowana Notified Area advantage was taken of this and a code of rules was provided according to which the tax in question had to be assessed, calculated and paid. The only materiality of these rules for the present purpose is that we observe that, in framing them, the Local Government has thought fit to depart from the language of the charging provision which, we have already said, imposes a tax on income and on nothing else by introducing a number of variations of that expression such as "income, or profits" "total annual income or profits" and so forth. All we mention this for is to point out again that on the present reference all we are concerned with is that which the tax has been imposed, upon, namely, the "income" of, the Assessee. 6. The short point in the reference, therefore, is what is the meaning of the word "income" as it appears in the respective notifications applicable to those two Notified Areas. 6. The short point in the reference, therefore, is what is the meaning of the word "income" as it appears in the respective notifications applicable to those two Notified Areas. The Notified Area Committees, notwithstanding the definition which has been given to the expression in the rules of one of them as "income or profits", have contended that the word "income" in the notification must be so literally construed as to mean everything that "comes in" and that there is no room for deducting outgoings or expenses of any kind. In other words, they contend for the extreme view that "income" means the gross amount of everything that comes in without deduction. The Assessee, on the other hand, contends that they must at least be allowed to deduct all those outgoings which would be deductible in a commercial sense before profits are arrived at. 7. In our view there can be no doubt but that the contention of the Assessees is the right one. We have the assistance in the first place of an expression of opinion, albeit in another context, by the Judicial Committee itself as to the commonly accepted meaning of the word "income". In Lawless v. Sullivan 6 AC 373 at 384, Sir Montague E. Smith, in construing a statute of New Brunswick containing the words "the amount of income", says this: Their Lordships have come to the conclusion, upon consideration of the Act in question, that there is nothing in the enactment imposing the tax, nor in the context, which should induce them to construe the word "income", when applied to the income of a commercial business for a year, otherwise than in its natural and commonly accepted sense, as the balance of gain over loss.... 8. That is very clear expression of opinion that the commonly accepted meaning of the word "income", apart altogether from any particular context, is "the balance of gain over loss." There have been, moreover, cases in India itself which have taken the same view.--Allahabad Bank Ltd. v. The Municipal Board Sitapur AIR 1936 Oudh 206 and Auraiya Pay Office of the Imperial Bank of India Ltd. v. The Notified Area Committee Auraiya 1938 AWR (HC) 166. 9. 9. In all the circumstances, we feel not, the least doubt that the proper construction to be given to the word "income" in each of the notifications relating to the Baghpat and Mowana Notified Area Committees respectively is that it means the net income of the Assessee in the same sense in which the word "profits" would commercially speaking be ascertained. The learned Additional District Magistrate has perhaps invited us to go a little further and to tell him what types of expenses and so forth should be deducted. We think it better to resist the temptation to do that and to confine ourselves merely to the question of principle. We shall, therefore, answer his own question by saying that the company in this case should be assessed on its net income for the years in question. We think that the proper order for costs is that the Assessees shall be entitled to their costs of this reference to the High Court in any event.