TMI Blog1954 (11) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... f Judicature at Bombay on a reference made at the instance of the appellant under Section 66(1) of the Indian Income-tax Act, 1922. By an assessment order dated the 31st March, 1948, the appellant was assessed by the Income-tax Officer, Bombay, for the assessment year 1947-1948 on a total income of Rs. 19,66,782 including a sum of Rs. 9,38,011 representing capital gains assessed in the hands of the appellant under Section 12-B of the Act. The said amount of capital gains was earned by the appellant in the following circumstances. The assessee had a half share in certain immovable properties situate in Bombay which were sold by the assessee and his co-owners during the relevant accounting year which was the calendar year ending on the 31st December, 1946, to a private limited company known as Mafatlal Gagalbhai Company Ltd. The profit on the sale of the said properties amounted to Rs. 18,76,023 and the appellant's half share therein came to the sum of Rs. 9,38,011 which was included in the assessment under Section 12-B. In April 1948, the appellant appealed from the said order to the Appellate Assistant Commissioner contending that Section 12-B of the Act authorizing the levy o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the Central Legislature as it fell within entry 55 and was valid either as a whole or, in any case, to the extent that it applied to individuals and companies. Although it was unnecessary for the learned Chief Justice to decide whether the Act could be supported as a valid piece of legislation falling within the scope of entry 54 yet in deference to the arguments advanced before the Court the learned Chief Justice expressed the view that it could not be so supported. Tendolkar, J., on the other hand, held that Act XXII of 1947 was wholly intra vires the Central Legislature as it fell within entry 54 and in this view of the matter he did not consider it necessary to discuss whether the legislation was covered by entry 55 in List I of the Seventh Schedule. In our opinion the view taken by Tendolkar, J., with respect to entry 54 is correct and well-founded. In the course of a lucid argument advanced with his usual ability and skill Mr. Kolah submitted that entry 54 which deals with " taxes on income " does not embrace within its scope tax on capital gains. "Income", according to him, does not signify capital gains either according to its natural import or common usage or accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that while income-tax legislation adopts an inclusive definition of the word "income" the scheme of such legislation is to bring to charge only such income as falls under certain specified heads (e.g., the 5 Schedules of the English Act of 1918 and our Section 6 read with the following sections) and as arises or accrues or is received or is deemed to arise or accrue or to be received as mentioned in the statute. The Courts have striven to ascertain the meaning of the word " income " in the context of this scheme. There is no reason to suppose that the interpretation placed by the Courts on the word in question was intended to be exhaustive of the connotation of the word "income" outside the particular statute. If we hold, as we are asked to do, that the meaning of the word "income" has become rigidly crystallised by reason of the judicial interpretation of that word appearing in the Income-tax Act then logically no enlargement of the scope of the Income-tax Act, by amendment or otherwise, will be permissible in future. A conclusion so extravagant and astounding can scarcely be contemplated or countenanced. We are satisfied that the cases relied on by Mr. Kolah and referred to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring in a Constitution Act which, as has been said, must not be construed in any narrow and pedantic sense. Gwyer, C. J., in In re The Central Provinces and Berar Act, XIV of 1938 observed at pages 36-37 that the rules which apply to the interpretation of other statutes apply equally to the interpretation of a constitutional enactment subject to this reservation that their application is of necessity conditioned by the subject-matter of the enactment itself. It should be remembered that the problem before us is to construe a word appearing in entry 54 which is a head of legislative power. As pointed out by Gwyer, C.J., in United Provinces v. Atiqa Begum at page 134 none of the items in the Lists is to be read in a narrow or restricted sense and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. It is, therefore, clear--and it is acknowledged by Chief Justice Chagla--that in construing an entry in a List conferring legislative powers the widest possible construction according to their ordinary meaning must be put upon the words used therein. Reference to legislative practice may be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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