M.N. Chandurkar, C.J.

1. The assessee carries on the business of manufacture and sale of pharmaceutical products. Its factory is admittedly situated on a piece of land of an extent of 7 grounds 310 sq. ft. which is covered by Tondiarpet, III Area, Town Planning Scheme. The Corporation of Madras made a demand on the assessee for payment of betterment contribution commonly called betterment tax of Rs. 2,406.09, Rs. 3,208.13 and Rs. 4,010-10 for the years 1969-70, 1970-71 and 1971-72 respectively. The contribution was demanded at the rate of 7.5 per cent. on the difference between the value of the land as fixed by the Arbitrator, namely, Rs. 1,500 per ground and the market value taken for the above-mentioned three years, namely, Rs. 6,000, Rs. 7,500 and Rs. 9,000 per ground, respectively. On the assessee disputing the quantum of demand, the Corporation agreed to receive a lump sum payment of Rs. 7,984.67 on the basis of a flat rate of Rs. 1,120 per ground. This amount was accordingly paid to the Corporation of Madras on July 23, 1975.

2. In the assessment proceedings for the assessment year 1975-76, the assessee claimed an amount of Rs. 7,985 as deductible being payment of bette