TMI Blog1976 (11) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... r had asked for reference of two questions. Since the Tribunal referred only one question, the Commissioner applied to this court under section 256(2) of the Income-tax Act, 1961. This court, by an order dated September 13, 1973, made in T.C.P. No. 12 of 1972, directed the Tribunal to refer another question, namely : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the sum of Rs. 3,32,000 assessed under the head 'other sources' is 'earned income' of the assessee ? " This question constitutes the subject-matter of T.C. No. 65 of 1975 while the first question constitutes the subject-matter of T.C. No. 170 of 1971. Thus, it will be seen that both these questions deal wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee contended before the Tribunal that the surcharge being an additional levy, the burden was on the department to prove that the income in question was unearned income attracting the rate referable thereto. The assessee also contended that the amount in question represented the accumulations of agricultural income and the income which the assessee obtained from his business activity in Ceylon and this contention having been rejected and there being no evidence to show that the amount in question was the income of any investment made by the assessee, the amount in question can only be earned income and could not have been treated as unearned income. The Tribunal held that in a fiscal statute where there is room for doubt regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Unit Trust of India Act, 1963 (LII of 1963), included in the total income, or (ii) in any other case, the amount of unearned income included in the total income, exceeds Rs. 30,000, a surcharge calculated on the difference between the amount of income-tax computed in respect of the income referred to in sub-clause (i) or, as the case may be, sub-clause (ii), if such income had been the total income and the amount of income-tax computed in respect of an income of Rs. 30,000 if it had been the total income, at the following rate, namely :-- (1) where the amount of the difference twenty per cent. of the amount does not exceed Rs. 10,000 of such difference ; (2) where the amount of the difference Rs. 2,000 plus 25 per cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computed in accordance with the preceding provisions of this Paragraph ; and (ii) the aggregate of the amounts of the surcharges calculated in accordance with clause (a) and clause (b) of this sub-Paragraph. " Section 2, sub-section (6), clause (c), of the Finance Act, 1968, states that the expression " earned income " and " unearned income " shall have the meanings respectively assigned to them in clause (c) and clause (f) of sub-section (7) of section 2 of the Finance (No. 2) Act, 1967 (XX of 1967). Consequently, we have to find out as to what is the meaning of the expression " earned income " and " unearned income " as contained in the Finance (No. 2) Act, 1967. Section 2, sub-section (7), clause (c), of the Finance (No. 2) Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal income under the provisions of the Income-tax Act, but does not include any such income on which income-tax is not payable under clause (iii) or clause (v) of section 86 of that Act or which is exempted from tax under a notification issued under section 60 or section 60A of the Indian Income-tax Act, 1922 (XI of 1922), as continued in force by clause (1) of sub-section (2) of section 297 of the Income-tax Act." The income in the present case not having been assessed as salaries and not having been assessed as profits and gains of business or profession, but having been assessed only as income from other sources, it will be It earned income " only if it is immediately derived from personal exertion of the assessee. Mr. Jayaraman, lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statute we are of the opinion that the burden is on the department alone to prove whether the particular income is earned income or unearned income for the purpose of applying the relevant rate of surcharge on the same. At no stage, the onus is cast on the assessee to prove that a particular income is earned income and not unearned income simply because the rate of surcharge with regard to unearned income is higher than the rate of surcharge with regard to earned income. The only argument of Mr. Jayaraman is based upon the alleged relief given to an assessee. We are of opinion that having regard to the statutory language dealing with the imposition of surcharge, no such question of relief and consequently the onus to obtain that relief on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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