9911796707
TMI Blog1977 (1) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act, 1961, in the hands of each of the assessees ? Two appeals were disposed of by the Income-tax Appellate Tribunal, Madras, in which the appellant was Shri M. M. Muthiah, as father and guardian of the minors, and the respondent in the present reference is also Shri M. M. Muthiah, as father and guardian of the two minors. A common question arose in both the appeals. Hence the two applications filed by the Commissioner of Income-tax, Madras-II. under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), were consolidated. Shri Murugappa Chettiar paid a sum of Rs. 2,000 on October 29, 1964, as annuity deposit referable to the assessment year 1964-65. Another sum of Rs. 11,070 under the same head was paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of the depositor, it is equitable to bring to tax the sums received in repayment even though they are receipted only by the nominees of the depositor. The Tribunal, after appreciating the contentions of the parties, was of the view that the said receipt by the assessees would not be income. Hence the reference on the question at the instance of the department. Chapter XII-A, which became effective from April 1, 1964, defined annuity deposit as meaning "a deposit of money required to be made under the provisions of this Chapter". It is not in dispute that Shri Murugappa Chettiar was a person who was obliged to make the annuity deposit. Section 280(d) of the Act contemplates the framing of an annuity deposit scheme. It also says that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is only in such circumstances and by a statutory fiction that the annually repaid instalment is treated as income in the hands of the depositor. While interpreting a taxing statute, there is no scope for intendment or assumption. Unless the charging section is expressive and clear, it is not possible to include all amounts received by an assessee as his income on the only contention that it would be equitable to do so. It is fundamental that there is no equity in a tax. If a slight doubt arises whether the money in the hands of an assessee is assessable at all as income, then it is also equally rational to interpret such a provision in favour of the assessee and against the revenue. It, therefore, follows that the contention of the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts are refunded after the depositor makes the annuity deposit in accordance with the provisions of the Act and the Scheme, then such instalments are added on to his income and he is liable to pay income-tax on it as if it is income earned during the year of receipt. But in the absence of a specific provision in the Annuity Deposit Scheme or in the Act (which contemplates a nomination on the part of the depositor), to tax refund of annuity deposit in instalments to nominees then we are in vain to find a charging section which could bring to tax such annual instalments received by the assessee not by virtue of any commercial activity of their own, not even by any deeming provision under the Act or under the Scheme, but by a fortuitous circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circumstances above stated, would not be "income". Strong reliance, however, was placed by Mr. Rangaswamy, learned counsel, on a decision of the Gujarat High Court reported in Commissioner of Income-tax v. Narottamdas K. Nawab [1976] 102 ITR 455 (Guj). There the learned judges were of the view that from a broader point of view, the instalments received by the nominee would retain its characteristic as income. The learned judges put it on the ground that the annuity deposit scheme being one of the measures to curb inflation and it was in that broad sense they were of the view that the character of the receipt, namely, income, which was originally received by him, does not change by reason of the fact that instead of being received in a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not escape the tax ? We are unable to see any justification in it as the contention of the revenue, if accepted, should apply to all situations uniformly and as it cannot apply in the illustration given by us, it makes us think that the amount received by a nominee of a depositor under the annuity deposit scheme would not be his income and it is not exigible to tax under the provisions of the Act. With great respect, we are unable to accept the broad proposition set down by the Gujarat High Court in [1976] 102 ITR 455 (Commissioner of Income-tax v. Narottamdas K. Nawab). The question is, therefore, answered against the applicant and in favour of the assessee with costs. The assessee shall have his counsel's fee fixed at Rs. 250 (Rupees tw ..... X X X X Extracts X X X X X X X X Extracts X X X X
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