TMI Blog1978 (2) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... or the purposes of allowing development rebate for the assessment year 1964-65 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the business of the assessee was not set up before December 31, 1963, and, consequently, no portion of the amount of Rs. 2,77,159 claimed as a revenue loss was admissible in computing the total income for the assessment year 1964-65 ? " For the assessment year 1965-66 : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that indirect expenses incurred before the commencement of production could be added to the cost of assets for granting depreciation allowance as also for the purposes of allowing developmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction only to the extent of 1/5th of the amount of the salary payable under s. 40(c)(iii) and that the second proviso of that clause is not applicable as the income chargeable under the head " Salaries " was not Rs. 7,500 or less. In that view he allowed only a sum of Rs. 13,200 of the perquisites and disallowed the balance of Rs. 15,326. Though the AAC held that the entirety of the perquisites had to be allowed as a deduction in view of the second proviso, the Tribunal, on further appeal, held : " Section 14 details the heads of income, and one such head is ' Salaries '. Section 15 specifies the types of income which shall be chargeable to income-tax under the head ' Salaries '. The payment made to the technical director would fall unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said that the remuneration payable to the foreign technician is chargeable under the head " Salaries ", but no tax could be levied as it is exempted under s. 10. For the purpose of understanding the second proviso, the income chargeable under the head " Salaries " alone is the criterion and whether it is exempt from tax or not could not change the position. Or, in the alternative, it is stated that, if the earlier submission is not correct, there should be some income chargeable under the head " Salaries " which is less than Rs. 7,500 and if the income chargeable under the head " Salary " is " nil ", the proviso would not be attracted. It is necessary to set out the relevant portion of s. 40(c)(iii) as it stood in the assessment year 1965-6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue is on the basis of this view of the ITO. This view is clearly opposed to the provisions of the Act and untenable. Section 4 charges the total income of an assessee to income-tax. Total income is defined in s. 2(45) as meaning the total amount of income referred to in s. 5 computed in a manner laid down in the Act. Section 5 defines total income in terms of residence. Section 10 exempts certain categories of income which are exempt from tax and provides that, in computing the total income, those incomes which are exempted in that provision shall not be included. The definition in s. 2(45) has made the manner of computation laid down by the Act as an integral part of the definition itself. Thus, it is not possible to treat anything ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the proviso. In other words, according to the learned counsel, the income chargeable under the head " Salaries " is less than Rs. 7,500. The learned counsel for the revenue on the other hand, contended that in order to attract the second proviso, there should be some income chargeable under the head " Salary " at least one rupee to say that this is less than Rs. 7,500 but where no part of the income is chargeable under the head " Salary " the proviso would not be attracted. Having given our anxious and careful consideration we are of the view that the words " Rs. 7,500 or less " would include a nil amount as well and it could not be understood to mean " from one rupee to Rs. 7,500 ". The legislature had not used any words which would ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
