1971 (10) TMI 23

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ioner, the respondent recomputed the income for the assessment year 1960-61 as follows : Rs. Property: 1,118 Share income (Loss) 47,059 Other sources: 1,312 ---------------- Net loss 44,629 ----------------- Capital gains 75,000 ------------------ Total capital gains 30,371 ------------------- Rs. Income-tax on Rs. 30,371 @ 4.2536 1,291.86 Surcharge 64.59 Special surcharge 193.77 ------------------- Total capital gains tax payable 1,550.22 -------------------- The petitioner is aggrieved against the computation made by the Income-tax Officer, as according to him, it does not satisfy the prescription in section 17(6) of the Income-tax Act, 1922, which provision is applicable to the fac....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....irds of the amount of such inclusion the same proportion as the whole amount of such inclusion bears to such reduced total income." We are not concerned with the proviso and, therefore, it is not extracted. Sub-clause (6) of section 17 is divided into two parts. Section 17(6)(i) expressly relates to income-tax and super-tax payable on the total income of the assessee as reduced by the amount of capital gains. In addition to such taxes so ascertained under the first sub-clause, income tax is also payable on the whole amount of such inclusion which obviously refers to the unabsorbed capital gains because in a case where the assessee's total income under the other heads results in profits, no question of absorption of capital gains would ar....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... all. To illustrate, it is said that if strictly the language has to be understood in the ordinary sense then no tax is payable in the instant case at all. The contention runs: If the loss is X and if the capital gain is Y (Y greater than X), then it is said that under sub-clause (i) of section 17(6), the total income should be ascertained as-X plus Y-Y, which is again a minus and, therefore, no tax is payable under that particular sub-clause. Then coming to sub-clause (ii), it is said that the figure has to be arrived at by calculating the algebraic expression "-X plus Y-2/3 Y", i.e., " -X plus 1/3 Y ". Applying this algebraic expression to the facts of this case, it would be-44,629 plus 25,000 which would again result in minus and, theref....