Law: Income Tax Act, 1922

Section: 15A,16

Income tax Act (XI of 1922)---Ss. 15 A & 16 Exemption from tax Interpretation of statutes ¬Section 16 saying that while computing total income various exemp¬tions mentioned therein have to be included while S. 15 AA not saying that exemption granted by this section should be excluded from total income but says that so much of investment as forms part of total income should not be taxed Basic principle of interpreta¬tion: Two provisions of law apparently contradictory in nature---¬Effort to be made to reconcile such provisions Legislature not to be supposed to have intended to contradict itself Interpretation of Ss. 16 & 15 AA read together: While total income could remain as it is inclusive of sum invested by assessee but in calculating tax so much of sum invested (subject of course to limitation prescribed by various sections) has to be deducted from total income as not taxable ¬Interpretation of S. 15 AA as being not applicable in case of super tax--¬Leads to absurdity Word "tax" as used in S. 15 AA includes both income tax and super tax Assessee, held, entitled to exemption of investment as envisaged in S. 15 AA to super tax as well [I. T. A's Nos. 13 and 14 of 1978 79 dissented from]. I. T. A's. Nos. 13 and 14 of 1978 79 dissented from. Maxwell on Interpretation of Statutes, 9th Edn., p. 163; Jamal Din v Muhammad Aslam P L D 1965 Lah. 503; Muhammad Zaman v. Collector of Hazara District P L D 1964 Pesh. 47 and Messrs Perfume Supply Co. v C. I. T. (1968) 17 Taxation 116 ref. ORDER These are three appeals of a registered firm deriving income from sate of footwear on retail basis and relate to assessment years 1975 76, 1976 77 and 1977 78. The declared and assessed position is as under : Rs. 1975 76 Sales declared. G. P. rate shown. 5,30,894 16.2% Sales estimated. G. P. rate applied. 6,50,000 20% The A. A. C. reduced the sales to and maintained the G. P. rate. 6,00,000 1976 77 Sales declared. G. P. rate shown. 6,12,957 15.6% Sales estimated. G. P. rate applied. 7,40,000 20% The A. A. C. reduced the sales to and maintained the G. P. rate. 7,20,000 1974 75 (6 months) Sales declared. G. P. rate shown. 2,17,901 16.5% Sales estimated. G. P. rate applied.…

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