TMI Blog1949 (10) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ritish India or outside British India, was assessed to excess profits tax. The assessee claimed that from the entire profits computed from the business outside British India, that is, the Bhutwal cloth business, a sum of ₹ 4,500 should be deducted in accordance with the third proviso to Section 4 (1) of the Indian Income-tax Act. On appeal the Appellate Assistant Commissioner decided in favour of the assessee, but on further appeal the Appellate Tribunal held that the proviso was not applicable and the assessee was not entitled to the deduction of ₹ 4,500 from the assessable income. On assessee's application the following question of law was referred to this Court for its opinion :- Whether the deduction of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three provisos and three explanations and then follow the other sub-sections of Section 4. It would appear that only a part of the enacting portion of sub-section 4 (1) has been incorporated in Section 5 of the Excess Profits Tax Act. The question for decision is whether the Legislature, though it excluded a part of sub-section (1) of Section 4 and incorporated only a part of that sub-section, intended to include the provisos and the explanations to sub-section (1) of Section 4. The third proviso to Section 4 (1) is as follows:- Provided further that if in any year the amount of income accruing or arising without British India exceeds the amount brought into British India in that year, there shall not be included in the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be adopted. He has further relied on the words profits made during the chargeable accounting period is chargeable to income-tax by virtue of Section 5 of the Excess Profits Tax Act . He has urged that the whole of Section 4 must be read together, the proviso being a part of the section, and if by reason of the proviso a sum of ₹ 4,500 was not liable for income-tax, then it could not be said that to this extent the profits were chargeable to income-tax under sub-clause (ii) of clause (b) of sub-section (1) of Section 4. The argument of Mr. Das on behalf of the Commissioner of Income-tax is that the portion of Section 4 that has been incorporated in Section 5 of the Excess Profits Tax Act is Section 4, sub-section (1), clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws : - Where a section of an Act of Parliament contains a proviso there is no rule that the first part, which may be described as the enacting part, is to be construed without reference to the proviso. The section must be construed as a whole, each portion throwing light on the rest. These authorities lay down the principle of interpretation. From the scheme of the Excess Profits Tax Act and the language used in Section 5 we have to decide whether the provisos to Section 4(1) were or were not intended to be made applicable to the provisions of the Excess Profits Tax Act. The question is of first impression as we are told that there are no authorities on the point. Having carefully considered the matter we have come to the conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s profits as determined in accordance with the First Schedule. There is no mention made in sub-section (19) or in the First Schedule to a deduction of ₹ 4,500 in accordance with the third proviso to sub-section (1) of Section 4 of the income-tax Act. Section 21 of the Excess Profits Tax Act mentions what sections of the Income-tax Act shall apply to the provisions of the Excess Profits Tax Act. There is one more point which has been brought to our notice that while under the Indian Income-tax Act ₹ 4,500 is exempted from income-tax, in the circumstances mentioned in the third proviso to sub-section (1) of Section 4, when and if the money is brought into British India, the income-tax becomes payable on such amount (see Com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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