Law: Income Tax Act, 1922

Section: 8,10,25(3)

Income tax Act (XI of 1922), Ss. 8, 10, 25 (3) Business-Discontinuance Business charged under Act VII of 1918 Exemp¬tionfrom payment of tax Concession whether available in respect of income from securities. The assessee was a registered firm which carried on business as a dealer in securities and as such the securities constituted the stock in trade of its business. The firm had paid tax in connection with this business under the provisions of the Income tax Act, 1918. On June 30, 1947, the firm was dissolved and it claimed the benefit of the provisions of section 25 (3) of the Income¬-tax Act, 1922. The question was whether the interest received on securities held by the assessee formed part of the assessees business income for the purpose of claiming relief under section 25 (3): Held, [by S T. Desai and K. T. Desai, JJ., (Tendolkar, J. dissenting)] that interest on securities which formed part of the stock¬-in trade of the assessees business was part of income, profits and gains of that business within the meaning of section 25 (3) and the assessee was entitled to exemption from tax in respect thereof under that subsection. Per S. T. Desai, J. No tax is to be charged in a case falling under section (2) (3), and Chapter III which deals with heads of income does not enter in to the scheme or meaning of section 26(3). Sections 7 to 17 in that Chapter are computing sections. They deal with the mode or manner of computation or ascertainment of the quantum of tax under various heads and come into operation only when tax has to be charged as enjoined by sections 3 and 4. Therefore, in a section which lays down that no tax is to be charged in respect of the income, profits and gains of a discontinued business in respect of the terminal period, it is not permissible to implant either the concept or the language and meaning of any of the sections 6 to 17. Per K. T. Desai, J. The expression "business" in section 25(3) can only refer to the activity which is styled business. What has to be discontinued is that activity before the section can apply. If what is to be discontinued is that activity business, the tax which is referred to in connection with that activity…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492