Super-tax computation under section 17 follows a set sequence: proportional increase first, then State-income relief.

For computing super-tax under section 17 of the Indian Income-tax Act, 1922, the statutory sequence required the increase under section 17(4)(a) to be made first on the reduced income, and only then was the adjustment under section 17(3) to be applied to exclude the super-tax attributable to State income at the average rate. The Tribunal's method followed that order of computation and was held to accord with section 17. The document therefore treats the computation as valid because section 17(3) operates after the proportionate increase under section 17(4)(a).

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Issues: Whether, for computing super-tax under section 17, the adjustment under section 17(3) is to be applied before or after the computation under section 17(4)(a), and whether the Tribunal's method of computation was valid.

Analysis: On the language of section 17, the super-tax was first required to be determined under section 17(4)(a) by making the proportionate increase on the reduced income and only thereafter was the benefit of section 17(3) to be given to exclude the super-tax attributable to the State income at the determined average rate. The sequence adopted by the Tribunal reflected this statutory order of computation.

Conclusion: The Tribunal's mode of computation was valid and in accordance with section 17 of the Indian Income-tax Act, 1922. The effect of section 17(3) had to be given after proportionately increasing the super-tax under section 17(4)(a).

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