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TMI Blog1954 (11) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ins of the assessee firm in the assessment for 1951-52 under the second proviso to section 10(2)(vii) of the Income Tax Act. Two questions were agitated before the Tribunal in appeal, one concerning the taxable quantum and the other concerning the validity of the proviso under which the assessment was made. The Tribunal found in favour of the assessee in regard to the quantum of the addition and reduced the addition to a sum of ₹ 86,854. They were unable to hold, however, that the impugned proviso was invalid or inoperative in the eye of law. At the request of the assessee the Tribunal have referred two questions of law for the decision of this Court, namely, (1) Whether the enactment of the second proviso to section 10(2)(vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the building, machinery or plant, as the case may be, is actually sold or its scrap value : Provided further that where the amounts for which any such building, machinery or plant is sold, whether during the continuance of the business or after the cessation thereof, exceeds the written down value, so much of the excess as does not exceed the difference between the original cost and the written down value shall be deemed to be profits of the previous year in which the sale took place :...... Two submissions have been placed before us in support of the contention that the second proviso is void and of no effect. It is stated in the first place, that the proviso in question is repugnant to the charging provisions of sections 3 and 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f language be regarded as inconsistent with or repugnant to each other. Again, it was contended that as the principal function of a proviso is to except something from the enacting clause and not to extend or enlarge the operation of the statute, neither the Department nor the Tribunal are justified in construing the proviso in question as imposing a liability. It is true that ordinarily a proviso is designed to restrict rather than to enlarge the provision to which it is appended but this is not an inflexible rule and there are cases in which the language might well lead one to the conclusion that the Legislature intended to exercise its enacting power. If after a careful examination of the proviso, the provision to which it is attached ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or in this country. It is true that in construing an Act which imposes a burden, doubts should be resolved in favour of the taxpayer but this general rule cannot be applied either when the taxing provision is clear and explicit or when a doubt arises in regard to a provision granting a deduction or an exemption from payment of tax. In United States v. Stewart the Supreme Court observed as follows : Those who seek an exemption from a tax must rest it on more than a doubt or ambiguity. Exemption from taxation cannot rest upon mere implications. For these reasons, I am of the opinion that notwithstanding the ingenious arguments which were addressed to us, both the questions which have arisen in the case must be answered in the negati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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