9911796707
TMI Blog1982 (3) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... ompensation received by the assessee to the extent of 50 per cent thereof related to the exploitation of the trade mark 'SKF' in India and would, therefore, be assessable in India. On this basis, 50 per cent of the fees mentioned above, being Rs. 4,99,309, was treated as the income of the assessee under the said item. In the earlier years, the Tribunal had also held that the expenses of the assessee relating to this item of income should be treated as 50 per cent and this was being allowed. But a new development took place in the form of introduction of section 44D of the Income-tax Act, 1961 ("the Act"), by the Finance Act, 1976, with effect from 1-6-1976. So far as it is relevant for the present purpose, the section provides that the dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire previous year and that he should have allowed expenses at 50 per cent for the period up to 31-5-1976. It was contended by the learned counsel for the assessee that the proposition that the law as on the first day of April of any assessment year should govern the assessment for that year, is not absolute and that it is subject to qualification by an express provision or necessary implication. In support of this contention, the learned counsel relied upon the ruling of the Madras High Court in Best Co. (P.) Ltd. According to the learned counsel, the fact that section 44D was introduced with effect from 1-6-1976 clearly indicates that it was to operate only from that date. It was claimed that the ruling of the Calcutta High Court in C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be applied is that in force in the assessment year unless otherwise provided expressly or by necessary implication. It was also held that the principle that a vested right cannot be divested will not be of avail against this cardinal principle. There is also force in the contention of the learned departmental representative that in the case of Best Co. (P.) Ltd., the amendment clearly indicated that it was to operate only from a particular date. It related to sub-clause (iii) of section 40(c). The sub-clause was substituted by the Finance Act, 1964. The sub-clause as substituted dealt with expenditure constituting perquisite incurred after 29-2-1964. The sub-clause prior to its substitution related to expenditure incurred after 29-2-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the section has been brought into force only from 1-4-1977, it would have governed the assessment for the assessment year 1977-78. As pointed out by the learned counsel for the assessee, it is a well established principle of law that no portion of a statute should be treated as redundant. The principle should apply to the date of bringing into force of the section also. The provision relates to the restriction of expenses and one cannot rule out the possibility that the section was introduced in the middle of the year for the purpose of enabling the assessees to adjust or control their expenditure accordingly. If this be so, it is only reasonable to hold that it should govern the particular item of expenditure only for the period after the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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