Contextual reading of "individual" under income-tax law extends relief to a Hindu undivided family and avoids double taxation.

The proviso to Section 55 of the Income-tax Act, 1922 was construed contextually to avoid double taxation of the same profits. Although a statutory term is ordinarily used consistently within a section, the court held that the word "individual" in the proviso could bear a wider meaning where the scheme and object of the provision required it. Read with the words "having a share in the firm," it included a Hindu undivided family as a partner in an unregistered firm. The practical effect was that the assessee was not liable to super-tax on the share of profits already covered by the proviso.

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Issues: Whether the word "individual" in the proviso to Section 55 of the Income-tax Act, 1922 includes a Hindu undivided family so as to exempt it from super-tax on its share of profits from an unregistered firm where the firm itself has already been assessed to super-tax.

Analysis: The proviso to Section 55 was construed in the context of the scheme of the Act and the policy against double taxation of the same profits. Although the same word ordinarily bears the same meaning in different parts of a section, a different meaning may be given where the context and the legislative scheme so require. The proviso was intended to prevent component parts of an unregistered firm from being taxed again when the firm had already borne super-tax. Reading the word "individual" with the words "having a share in the firm" supported a wider meaning that would include a Hindu undivided family acting as a partner. The suggested distinction between an ordinary individual and a Hindu undivided family was rejected as inconsistent with the object of the proviso.

Conclusion: The word "individual" in the proviso to Section 55 includes a Hindu undivided family. The assessee was not liable to super-tax on the share of profits covered by the proviso.

Ratio Decidendi: A statutory term in a proviso may be read in a contextually wider sense than in the main provision where that construction better advances the scheme of the Act and avoids double taxation.

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