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TMI Blog1965 (11) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... f the securities. It cannot obviously mean interest receivable minus the amount spent in receiving the same. We, therefore, hold agreeing with the High Court, that no income-tax is payable in respect of the entire interest of ₹ 44,720 earned by the assessee from securities issued by the former Native States. Appeal dismissed. - - - - - Dated:- 23-11-1965 - Judge(s) : K. SUBBA RAO., J. C. SHAH., S. M. SIKRI JUDGMENT The judgment of the court was delivered by SUBBA RAO J.---The respondent, the South Indian Bank Limited, Trichur, is a banking company. This appeal is concerned with the assessment year 1956-57, the corresponding previous year being the calendar year 1955. During the accounting year the bank received a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st of Rs. 44,720 was entitled to rebate for income-tax under the notification issued by the Central Government in exercise of its powers under section 60A of the Indian Income-tax Act, 1922. Hence the appeal. Mr. R. Ganapathy Iyer, learned counsel for the revenue, argued that under section 8 of the Indian Income-tax Act, income-tax was computed under the head " interest on securities " in respect of the interest received by an assessee on any Government securities minus the expenditure incurred by him to realise the same in terms of the first proviso and the Explanation thereto, that when under the third proviso the assessee was exempted from paying tax on the interest receivable on any securities of the State Government issued income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act provides for the computation of income and deductions therefrom under the head " Interest on securities". Section 60 of the Act confers a power on the Central Government to make an exemption, reduction in rate, or other modifications in respect of income-tax in favour of any class of income or in regard to the whole or any part of any income of any class of persons. This power is conferred on the Government to meet special situations de hors section 8. If section 8 of the Income-tax Act makes an exemption in respect of a particular income, there is no scope or occasion for invoking the special power conferred on the Central Government under section 60A of the Income-tax Act. Unless we accept the contention that the notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries. It includes the said exempted interest in the total income of the assessee for the purpose of section 16 of the Income-tax Act. Shortly stated, the notification is a self-contained one; it provides an exemption from income-tax payable by an assessee on a particular class of income subject to specified conditions. Therefore, there is no scope for controlling the provisions of the notification with reference to section 8 of the Income-tax Act. The expression " interest receivable on income-tax free loans " is clear and unambiguous. Though the point of time from which the exemption works is when it is received within the territories of the State of Travancore-Cochin, what is exempted is the interest receivable." Interest receivable " can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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