Law: Income Tax Act, 1922

Section: 15,15AA,15D(3),16

Income-tax Act (XI of 1922)--Ss. 15-AA, 15-D (3) & 16-Investment in Government securities ­Exceptions-Concept of "taxable income"-Foreign to Registered firms-Registered firm-To be taxed on total income and to pay super-­tax as diminished by rebate allowed for investment under S. 15-AA. ORDER M. KARIM (MEMBER):---In this appeal the appellant has raised objection against rebate allowed for investment made under section 15-AA of the Income tax Act. The appellant's objection was that rebate was wrongly allowed in place of deduction of the amount invested from the total income. 2. The appellant is a registered firm which claimed investment allowance under section 15-AA of the Income tax Act. The appellant's claim was that the amount should have been deducted from the total income of the firm instead of rebate allowed according to the rate of tax paid. In order to appreciate the appellant's claim it will be better if we reproduce here the relevant part of section 15-AA of the Income tax Act:- "15-AA. Exemption of investment to Government securities, etc.-(1) Sub­ject to the provisions of subsections (3) and (4) of section 15 and subsection (3) of this section the tax shall not be payable by an assessee, not being a company, on so much of his total income as is invested by him in the purchases of Post Office Savings Certificates, Unit Trust Certificates not being Bearer Certificates i9sued by the National Investment Unit Trust and such Government Securities (including Development Loans) and shares of such investment com­panies as may be specified by the Central Board of Revenue in this behalf." We would also quote clause (a) of subsection (1) of section 16 of the Income-tax Act. "16. Exemption and exclusions to determining the total income.-(1) In computing the total income of an assessee- (a) any sums exempted under the first and third provisions to sub­section (1) of section 7, the second and third provisos to section 8, sub-section (2) of section 14, section 15, section 15-A, section 15-AA, section 15-B, section 15-C, section 15-CC, section 15-D and section ; shall be included." From the above it is clear that before arriving at the amount of tax which shall…

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