TMI Blog1933 (7) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... e's total income for the year of assessment 1932-33 to be as follows: I. Income from Securities- Rs. A.P. Rs. A.P. Rs. A.P. Tax Free 135 0 0 Taxed (gross) ... 278 0 0 413 0 0 II Income from Property- Total Rents ... 6,875 0 0 Service taxes ... 851 0 0 Annual value ... 6,024 0 0 Less 1/6th ofAnnual value ... 1,006 0 0 Insurance 134 0 0 Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,640 0 0 Profits of Co-operative Credit Society, in whole rupees ... ... ... 6,641 0 0 10,802 0 0 IV. Income from other sources: Bank interest ... ... ... 835 0 0 Total income ... 11,637 0 0 Income-tax was assessed upon heads I, II and IV, of the assessee's income upon the ground that such income was not part of the profits of the assessee exempted from income-tax under the notification of 25th August, 1925. Now it appears to me that the intention of the Governor-General in Council was to exempt from income-tax under the notification the profits accruing to co-operative societies from carrying on the business of a mutual co-operative society, upon the ground that a man cannot make a loss or profit out of himself, per Buckley, L. J., in Carlisle and Silloth Golf Club v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows stronger with each successive re-enactment : Income-tax Commissioners v, Pemsel [1891] AC 531 and Madras Provincial Co-operative Bank, Ltd. v. Commissioner of Income-tax, Madras [1933] ITR 158. It is urged that the assessee society has not previously been assessed upon the income it has received from investments or house property, but in considering what was the intention of the legislature when it issued the notification in question that fact does not appear to me to be of importance. The main contention on behalf of the assessee is that what matters is not what the Governor-General in Council intended but what he did; that income, profits and gains as used in the Income-tax Act are synonymous terms, and that the whole of the society's income is exempt from income-tax under the notification. In support of his argument the learned advocate for the assessee cited the following passage from the judgment of the Judicial Committee of the Privy Council in Commissioner of Income-tax Bengal v. Shaw Wallace Co. AIR 1932 PC 138 at p. 1350 (of 59 Cal.): The object of the Indian Act is to tax income, a term which it does not define. It is expanded, no doubt into i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st, 1925, is used in this latter sense, and prima facie there fore neither interest from securities nor income derived from property are profits within the meaning of that term as used in the notification. The learned Government Advocate on be half of the Commissioner of Income-tax contended that as the income derived from investments and from property is classed and chargeable under separate heads of income in S. 6 of the Act, it is nihil ad rent that such income may also in the circumstances of any particular case fall within the head business, for such income, being chargeable as interest on securities or as property is not to be regarded or treated as profits, but as in come in the strict meaning of those terms, and therefore is out side the ambit of the notification. I am not able to accept this contention. It may be that the investment of capital in property or securities is part of the business of an assessee, and in such a case, in my opinion, the net income accruing from such investments would be, and be chargeable as profits of the business. Whether such investments are profits of a business carried on by an assessee, in my opinion, is a question that depends ..... X X X X Extracts X X X X X X X X Extracts X X X X
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