TMI Blog1969 (1) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1957. The assessee had various sources of income out of which one source was the income from dividends. The Income-tax Officer, Special Investigation Circle, Jaipur, while assessing the income of the assessee, increased the income-tax on diviend income which was undoubtedly included in the unearned income by 15 per cent. to compute the amount of special surcharge as per the Finance Act, 1957. The assessee challenged the assessment order by filing an appeal before the Appellate Assistant Commissioner of Income-tax, A Range, Jaipur, on various grounds, but this question that special surcharge at the rate of 15 per cent. could not be imposed on his dividend income was not raised in that appeal by the assessee. It was for the first time that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the assessee, urged that under the scheme of the Indian Income-tax Act, 1922, no other tax except the income-tax could be charged from the assessee and the surcharge or special surcharge, as provided by the Finance, Act of 1957, is included in the term " income-tax ". He also urged that the mode of computing income-tax on dividend income is given in section 2(3)(a) of the Finance Act of 1957, according to which the income-tax on dividend income can be computed by applying the rate or rates applicable under the operation of the Finance Act of 1956, and, therefore, according to him, the assessing authority could not have charged special surcharge at the rate 15 per cent. as provided by the Finance Act (No. 2) of 1957, as that rate c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dividend income shall escape the levy of a special surcharge which is required to be imposed under section 2(1)(a) of the Finance Act, 1957, read with the First Schedule appended to that Act which prescribes the rate for the special surcharge on unearned income. There is no controversy on this point between the parties that the amount of surcharge or special surcharge is the part of income-tax calculated under the provisions of the Finance Act (No. 2) of 1957. Special surcharge has been for the first time levied by Parliament in 1957 on unearned income at 15 per cent. and the income derived from "dividend" undoubtedly falls within the term "unearned income". The controversy that has been raised before us centres round the interpretation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is the amount of income-tax simpliciter which is determined and which does not include the amount either of surcharge or special surcharge. Under the scheme of sub-section (1) of section 2 of the Finance Act, 1957, the income-tax shall be charged on the dividend income in accordance with the provisions of sub-section (3) of that section because for calculating the income-tax on dividend income the provisions of sub-section (3) are attracted and it is then the amount of income-tax so calculated shall be increased by a surcharge for the purposes of the Union and a special surcharge on unearned income calculated in either case in the manner provided therein. This scheme of sub-section (1) of section 2 of the Finance Act of 1957 leaves no ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harges on income-tax" in the First Schedule of the Finance Act of 1957, the argument of learned counsel for the assessee loses all its force. We are definitely of opinion that the "income-tax" as used in section 2(3)(a) of the Finance Act, 1957, simply connote that amount of tax on dividend income which does not include the surcharge or special surcharge. It may also be observed that the levy of a special surcharge was for the first time provided by the Finance Act, 1957, and it is contended by Mr. Bhandari that this provision was made by Parliament to meet the financial exigencies of that particular year and it was laid down that special surcharge should be realised on all kinds of unearned income in that financial year. This argument of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
