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TMI Blog1958 (12) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the manner laid down in the Income Tax Act? 2. The relevant facts are these : The assessee is a chartered accountant. During the accounting year which ended on 31-12-1950 the assessee earned ₹ 31,006/- from the practice of his profession, he received also a further income of ₹ 741 from other sources, making a total of ₹ 31,747/-. He incurred a loss of ₹ 15,598 in respect of the properties that he owned. The result was that his total net income for the year was only ₹ 16,149. The assessee claimed that he was entitled to earned income relief under Section 15-A of the Income Tax Act in respect of ₹ 31,006, which was the income he received from the practice of his profession, subject to the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any assessment for the year ending on the 31st day of March, 1951, there shall be deducted from the total income of an assessee, in accordance with the provisions of Section 15-A of the Income Tax Act, an amount equal to one-fifth of the earned income, if any, included in his total income, but not exceeding in any case four thousand rupees.'' Clause (15) of Section 2 of the Income Tax Act, defines the expression total income in these terms : 'Total income' means total amount of income, profits and gains referred to in Sub-section (1) of Section 4 computed in the manner laid down in this Act..... It will be noticed that Section 15-A is general in its terms and merely enacts that an assessee is not liable to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtainly be inappropriate to say that earned income is included in the total income because it is smaller than the earned income, and, obviously the smaller cannot include the larger. The fourth case further emphasises this inappropriateness. It will thus be seen that the words used in Section 15-A of the Income Tax Act and Section 2 (2) of the Finance Act of 1950 are no: very felicitous. 6. Since the concept of total income is larger than the concept of earned income it was probably assumed without subjecting the matter to detailed analysis that the total income of an assessee would always be larger than his earned income. Whether this was so or not, the intension appears to have been to provide relief to the assessee in respect of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration. If the view contended for on behalf of the Department is right, it would have been far simpler to say in Section 2 (2) of the Finance Act, 1950 one-fifth of the earned income or of the total income, whichever is smaller, but not exceeding four thousand rupees. 8. The view contended for by the Department will also produce this result. Of two persons whose earned incomes are equal, the person who has suffered a loss in other respects can get exemption only on a smaller amount than the one who has suffered no loss at all. No doubt where the language used in a taxing statute is clear questions of hardship and inequalities cannot be considered. But, where they are not clear such considerations may be properly taken into account. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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