9911796707
TMI Blog1963 (2) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... , is entitled to rebate of income-tax?" The answer to this question depends on the interpretation of section 8 of the Indian Income-tax Act as well as the notification issued by the Central Government acting under section 60A of the Indian Income-tax Act. Section 8 provides that: "The tax shall be payable by an assessee under the head 'Interest on securities' in respect of the interest receivable by him on any security of the Central Government or of a State Government, or on debentures or other securities for money issued by or on behalf of a local authority or a company." There are three provisos to the section and an Explanation. The first proviso reads: ".....that no income-tax shall be payable under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the above section and the notifications, it is contended by counsel for the department that only the net income after deducting from the gross income the reasonable sum expended for realising the gross income, should be added for ascertaining the total income. It is, therefore, urged that the net income must be calculated as provided in the Explanation to section, the relevant portion of which is in these terms : "Explanation : In the case of a banking company,- (a) the amount which bears to the aggregate of its expenses as are admissible under sub-section (2) of section 10, other than under clauses (iii), (vi ), (via), (vib), (vii ), (viii), (xi), (xii ), (xiii), and (xiv) thereof, the same proportion as the gross receipts from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only exempts the income-tax payable on the interest receivable. According to him, the income-tax payable on the interests receivable will have to be calculated in accordance with the terms of the section, and, therefore, necessarily by applying the first proviso to the section. On the other hand, the assessee's counsel submits that the third proviso to the section contemplates the calculation of the tax on the entire interests receivable by the assessee. It is unnecessary to decide this question in the view that we are taking of the effect of the notification issued under section 60A of the Indian Income-tax Act. The wording of the notification is clear. The entire interest receivable by an assessee, in respect of securities specified ..... X X X X Extracts X X X X X X X X Extracts X X X X
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