1964 (7) TMI 8 - SC - Income Tax

Whether the assessee is entitled to the benefit of section 25(3) in respect of the interest on securities ?

Held that:- The schemes of section 25(3) and section 26(2), proviso, are different. The first grants an exemption because there has been a double levy of tax, and an intention to exempt all income, profits and gains of business from taxation may be attributed to the legislature. Section 26(2) fastens liability of the predecessor, if he cannot be found, upon the successor and must be strictly construed. The legislature has imposed by section 26(2) liability upon the successor to be assessed for profits earned in business carried on by his predecessor, and unless there is a clear intention expressed in the statute to include in that expression what in reality is not income, but is deemed income, the liability to assessment would justifiably be limited to profits of the business which is computable under section 10. Appeal dismissed.