9911796707
TMI Blog1992 (2) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... operty, etc., amounting, in all, to Rs. 3,10,757. So far as the assessment year 1968-69 is concerned, the Income-tax Officer determined the assessee's total income at Rs. 1,32,827. While determining the said income, the Income-tax Officer allowed set off of business loss of Rs. 1,11,334 and deduction of expenses of Rs. 15,574 against the income from dividend. The Income-tax Officer levied surcharge on unearned income of the total income of Rs. 1,34,967 for the assessment year 1967-68 and Rs. 1,32,827 for the assessment year 1968-69 in accordance with the provisions contained in Part I of the First Schedule to the Finance (No. 2) Act, 1967 ("the Finance Act" for short). Thereafter, on verification of the records of the assessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69 was Rs. 2,85,883, the Income-tax Officer held that the said unearned income was to be treated as the total income for the purpose of levy of surcharge. The Income-tax Officer further held that the dividend income was treated as unearned income while making the assessment and, consequently, there was no question of treating the said income as earned income while exercising powers of rectification under section 154 of the Act, as urged on behalf of the assessee. In this view of the matter, the Income-tax Officer rectified the orders for both the assessment years under reference and levied surcharge on unearned income of Rs. 2,94,988 for the assessment year 1967-68 and on Rs. 2,85,883 for the assessment year 1968-69. Being aggrieved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of surcharge on unearned income required interpretation of the expression "amount of unearned income included in the total income" and, therefore, it could not be said that the matter was free from argument and debate, and, consequently, rectification proceedings under section 154 of the Act were bad in law. On merits, the Tribunal, for the reasons recorded in its order, upheld the view of the Appellate Assistant Commissioner. The Tribunal also rejected the assessee's contention that income from dividend should be treated as earned income. In the result, the Tribunal dismissed the Revenue's appeal and the assessee's cross-objections. The Revenue, being aggrieved by the order of the Tribunal, at its instance, the following questions have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, not being income by way of interest on any security of the Central or State Government or income received in respect of units from the Unit Trust of India, established under the Unit Trust Of India Act, 1963 (52 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. 15,000, 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. 15,000, if it had been the total income, at the following rate, namely :-- (1) where the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia, established under the Unit Trust of India Act, 1963, included in the total income, exceeds Rs, 15,000, a surcharge calculated in the manner laid down in the said provisions is to be added to the income-tax payable on the total income of the assessee. It is clear that the surcharge, which is leviable under the said provision is to be levied on the unearned income which is included in the total income on which the income-tax is levied in accordance with the specified rates. Therefore, in order to determine surcharge which is leviable, we have first to find out what is the total income on which income-tax is levied. The next step would be to find out what is the unearned income which is included in this total income. In other words, what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no total income on which income-tax could be levied. We are in full agreement with the view taken by the Tribunal that, in any case, the question which is raised by the Revenue is debatable or it would require long drawn arguments in order to come to the conclusion that there is a mistake in the computation of surcharge. Therefore, as held by the Supreme Court in T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50, the mistake cannot be said to be a mistake apparent on the face of the record so that it could be rectified in exercise of the powers under section 154 of the Act. In the result, we answer the questions which are referred to us in the affirmative and, against the Revenue. Reference answered accordingly with no or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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