TMI Blog1995 (6) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... nterests of revenue inasmuch as deduction claimed in respect of investments of Rs. 28,000 under section 80C, Rs. 30,000 under section 80CCA and expenditure of Rs. 11,000 under section 80G did not qualify for deduction under Chapter VI as those were not made out of current income chargeable to tax, the expenditure of Rs. 2,81,477 claimed against agricultural income of Rs. 4,34,929 was not properly enquired into and receipts from nursery at Rs. 5,54,282 were not brought to tax. He, therefore, set aside the assessment to the Assessing Officer to reframe the same aftermaking enquiries into the source of investment made under section 80C and 80CCA and donation made under section 80G, determine the agricultural income after considering all the material and to pass a speaking order giving a fair and reasonable opportunity to the assessee of being heard. 3. Mr. M.R. Varma, CA, the ld. counsel for the assessee vehemently urged that the assessment as made by the Assessing Officer was not at all erroneous and prejudicial to the interests of revenue inasmuch as the same was made after having conducted proper enquiries into various claims of the assessee and examination of the accounts. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer was quite sketchy and cryptic and therefore the ld. CIT was justified in treating the same as made without conducting proper enquiries and setting aside the same on the ground of being erroneous and prejudicial to the interests of Revenue. The ld. D R further submitted that in order to qualify for deduction under Chapter VI-A the payment of investment under section 80C, 80CCA and the donation under section 80G should be out of current income chargeable to tax. 5. After having given our thoughtful consideration to the arguments advanced by the ld. counsel for the parties and on study of the material placed before us and the law applicable thereto, we are satisfied that the assessment as made by the Assessing Officer in the case of the assessee for this year was not erroneous and prejudicial to the interests of Revenue so as to confer jurisdiction under section 263 upon the ld. CIT to set aside the same for reframing. 6. The ld. D R may be correct in his submission that the Assessing Officer had passed a very short and cryptic order in this case and such order could have given the impression that proper enquiry into various claims of the assessee was not conducte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of our people. To encourage the tax payer to contribute to the national saving, some concession in the form of tax rebate is given to him in the computation of his total income. The stress is on savings which may be utilised for the growth of national economy. Keeping in view such an object the provisions like section 80C, 80CCA and 80G are required to be interpreted. They are required to be so interpreted as not to nullify the object behind such provisions, as was observed by the Supreme Court in Chandulal Harjiwandas. Adopting such an approach to the present case, we shall consider the scope of total income and examine whether the scope of the total income includes agricultural income as well. 8. Section 4 is the charging section. It provides that where any Central Act enacts that Income-tax shall be charged for any assessment year at any rate or rates, income at that rate or those rates shall be charged for that year. It may be noted that the charging section clearly speaks of charge of the income-tax at certain rates which might be in force in a particular year. Section 5 deals with the scope of total income and provides that subject to the provisions of the Act, the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee's current income chargeable to tax. This approach seems to have been endorsed by several High Courts and the Supreme Court in a number of cases. 10. In the case of S. Inder Singh Goil the Bombay High Court held that though sums exempted from tax under section 15(1) of the Act of 1922 need not necessarily be part of assessable income but in order to claim exemption under section 15(1), the assessee must at least establish that the sum in respect of which he claims exemption under section 15(1) have the quality of entering the field of taxation. 11. Expressing a similar view in the case of K.J. Joseph, the Karnataka High Court held that the inclusion of agricultural income in the computation of total income for purposes of determining the rate at which non-agricultural income is to be taxed, is not unconnected with the object of the taxing statute. This decision too suggests that the agricultural income may have a bearing upon the determining of the tax liability of a person having non-agricultural income chargeable to tax. 12. In case of Ravi Kumar Mehra, the Punjab and Haryana High Court held that the Life insurance premia paid out of the amount lying to the credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee should have saved agricultural income and invested the interest on past savings in fresh investments in this year. The intention of Legislature behind the said provision does not seem to be that highly technical. Viewed thus, it is established that the assessee was not only in a position to make payments for the above-mentioned investments and expenditure from out of his income chargeable to tax, but also from such of his income which was taken into consideration for the determination of a proper rate of taxation for the income chargeable to tax in his case. The investments made under section 80C, 80CCA 80G were thus having a link with assessee's income chargeable to tax. In view of these facts,the Assessing Officer cannot be said to have taken a wrong view of either facts or of law in allowing deduction under section 80C, 80CCA and 80G of the Act. His order on that aspect of the matter was not revisable under section 263 of the Act. 15. The other ground which weighed with thl ld. Commissioner for revising the order of the Assessing Officer was that the income from Nursery at Rs. 5,54,282 was not subjected to income-tax as was held in 64 ITR 364 (All). We could ..... 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