TMI Blog1936 (5) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... last due-interest-date to date of purchase, is the said computed interest deductable from the interest actually received by him, in assessment under section 8 of the Act? The assessment in question was made on a total income of ₹ 3,00,099 including ₹ 2,68,785 under Section 8 of the Income tax Act. The latter sum is made up as follows:- Interest (gross) received from Government in respect of securities purchased 1926-32 ... 2,55,750 0 0 Interest (income-tax free) received in respect of securities purchased from April to November 1933 ...13,035 0 0 Total ... 2,68,785 0 0 From this sum the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner has stated that so far as appears the amount of ₹ 9,102-1-4 is wholly comprised of the computed interest. We are not concerned with the past practice of the Income- tax authorities. Section 8 makes income-tax payable by an assessee under the head 'Interest on securities' in respect of the interest receivable by him on any security of the Government of India etc. This section can only have one meaning and that is that income-tax is payable on the interest receivable from Government by any holder of such a security. This was the view taken by a Special Bench of the Patna High Court in Ranjit Prasad Singh v. Commissioner of Income Tax, Bihar and Orissa. There the opinion was expressed that section 8 of the Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest adjustments between transferors of negotiable securities. Section 18(3) requires that ordinary income-tax (when due) shall be deducted at the time of the payment while Section 18(5) provides that any such deduction shall be treated as a payment of income-tax on behalf of the owner of the security and credit shall be given to him therefore in the assessment, if any, made for the following year. Lastly, Section 48(3) provides for refund of the excess so credited to the owner of the security, if in the event the due charge is less than the deduction. The credit, therefore, under Section 18(5) can only be allowed to the owner of the security on his producing the certificate necessary under rule 38 while it is impossible to consider co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because he is buying supertax; and if a man wants to sell a security, if he is on the super- tax level he had better sell when it is full of dividend, because then he is selling super-tax. These are accidents which do not seem to me possibly to affect the administration of the Act, and I cannot conceive how the Acts could be administered, except at great cost and inconvenience not only to the Revenue but to private people who now are not concerned with these minutiae, if the contention which the Crown put forward here, not in their own interest but in the interest of purchasers really, was to succeed. The last observation of ROWLATT, J., has already been alluded to by me when dealing with the machinery sections. Clearly it would be imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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