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TMI Blog1962 (3) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... rent of ₹ 17,000 per annum. This rent income was assessed under section 12 of the Act and the assessee was allowed in the past allowances under sub-section (3) of section 12. This property was sold on 1st August, 1955. In the assessment year 1956-57, the Income-tax Officer assessed the proportionate lease rent up to 31st July, 1955, amounting to ₹ 11,900. He also held that there was a profit of ₹ 42,629 to the assessee on the sale of the property which was assessable under the second proviso the section 10(2)(vii) real with section 10(2)(vii) was inapplicable when allowance were claimed under sub-section (3) of section 12 in respect of the income assessable under section 12 was rejected by the Income-tax Officer. In an appeal preferred by the assessee, the Appellate Assistant commissioner took the view that the sum of ₹ 42,629, which represented the amount of profit on sale of the property, was not assessable under the aforesaid proviso real with section 12(3). His reasoning was that under section 12(3) the assessee was entitled to allowances in accordance with the provisions of clause (iv) to (vii) of section 10(2) and was not made subject to any liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he grant of allowances under section 12(3) read with clause (iv) to (vii) of section 10(2). It was further raged that even if section 12(3) made no specific mention of the second proviso to section 10(2)(vii), the assessee would be liable to assessment in respect of the profits under that proviso as the definition of "income" given in section 2(6C) included any sum deemed to be profits under that proviso. In our the judgment, having regard to the plain language of section 12(3), the submission put forward by the learned Advocate-General must be rejected notwithstanding the considerations of the object of clause (vii) and of the second proviso on which considerable stress was laid by him. It is well settled that in the construction of a taxing statute intendment or equitable principles cannot be imported. The meaning of a taxing provision must be ascertained from its language uninfluenced by considerations of the reason of the provision. To use the often quoted expression, "nothing is to be read in, nothing is to be implied. One can only fairly look at the language used." Now, the material part of clause (vii) of section 10(2) reads as follows: "10(2). Su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down value of a building, machinery of plant in year of account and the price at which it is sold (the price not being in excess of the original cost) is deemed to be profit in the year of account and as such liable to be included in the assessable income in the year of assessment. The effect of the proviso is no doubt to take back what had been allowed by way of depreciation in preceding years. But it is one thing to say that the proviso has the above effect and quite different to say that the proviso lay down a condition under which depreciation allowance spoken of in clause (vii) can be disallowed or the amount allowed in the preceding years can be demanded back. The true nature of the proviso has been explained by the Supreme Court in Commissioner of Income-tax v. National Syndicate [1961] 41 I.T.R. 225 ; [1961] 2 S.C.R. 229. Hidayatullah J., delivering the judgment of the court, said in that case: "These two cases deal with the second proviso to section 10(2)(vii). Clause (vii) deals with loss and the second proviso with profits; but the proviso is not an exact counterpart of the clause. The proviso enacts a fiction which the main clause does not enact. The reason for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the written down value is made chargeable to income-tax, its character is not altered, and it is not converted into the assessee's business profits. It does not reach the assessee as his profits; it reaches him as part of the capital invested by him the fiction created by section 10(2)(vii), second proviso, notwithstanding." In Commissioner of Income-tax v. Bipinchandra Maganlal [1961] 41 I.T.R. 290 ; [1961] 2 S.C.R. 493 the second proviso has no doubt been described as an exception. But the above observations make it very clear that the proviso cannot be regarded as an exception in the sense of prescribing a condition for the disallowance of the allowance or of its refund. This character of the proviso is reinforced by the definition of "income" in section 2(6C) which includes any sum deemed to be profits under the proviso in the definition of "income". If as we think, clause (vii) deals with allowances in the computation of profits or gains of business and the second proviso with fictional profits which are liable to be included in the assessable income, then it is easy to see that the expression "he shall be entitled to allowances in accordanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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