TaxTMI 
TaxTMI 
2005 (4) TMI 44
X X X X Extracts X X X X
X X X X Extracts X X X X
....rned from these securities as exempt within the meaning of section 10(15)(iv)(h) of the Act. The Assessing Officer denied the exemption for part of the interest. The Commissioner of Income-tax (Appeals) allowed the entire claim of exemption of interest on such bonds. The Tribunal was also inclined to allow the exemption of interest on these bonds, but it held that if these bonds were purchased from the market the ratio laid down by the Supreme Court in Vijaya Bank Ltd. v. Addl. CIT [1991] 187 ITR 541 would apply. Hence the Tribunal remanded the matter, and directed the Assessing Officer to examine this aspect. It was submitted by learned counsel for the appellant that section 5 10(15)(iv)(h) of the Income-tax Act, clearly exempts such....
X X X X Extracts X X X X
X X X X Extracts X X X X
....id item shall be admissible only if the holder of such bonds registers his name and holding with the said Corporation. (Sd.) Nutan Sharma, Under Secretary to the Government of India. [No. 8315/F. No. 328/20/88-WT]" Notification No. S.O. 284 (E), dated April 17, 1989 reads as follows: "In exercise of the powers conferred by item (h) of sub-clause (iv) of clause (15) of section 10 of Income-tax Act, 1961, the Central Government hereby specifies '10 year-9% (tax-free) Secured Redeemable Non-Convertible REC Bonds (19th Series) (Private Placement)', issued by the Rural Electrification Corporation Limited, for the purpose of the said item: Provided that the benefit under the said item shall be admissible only if the holder of su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Tribunal has remanded the matter. In paragraph 10 of its order, the Tribunal has observed: "But it is not clear from the record whether the bonds were subscribed for or purchased in the market. In the event the bonds are subscribed, then interest earned would be exempted under section 10(15) of the Act. If the bonds were purchased from the market, then the ratio laid down by the Supreme Court in Vijaya Bank's case [1991] 187 ITR 541 would apply". In our opinion, the distinction drawn by the Tribunal is wholly untenable and irrelevant. All that has to be seen in the present case is whether the assessee is the holder of the bond or debenture and whether the holder of such bond or debenture has got his name registered with the company....
X X X X Extracts X X X X
X X X X Extracts X X X X
....There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." This judgment has been followed by the Supreme Court in A.V. Fernandez v. State of Kerala [1957] 8 STC 561; AIR 1957 SC 657 and other decisions. As observed by the Supreme Court if the words of a taxing statute fail, so must the tax, vide ITO v. T.S. Devinatha Nadar [1968] 68 ITR 252 and CIT v. Elphinstone Spinning and Weaving Mills Co. Ltd. [1960] 40 ITR 142 (SC). In Innamuri Gopalam and Maddala Nagendrudu v. State of A.P. [1963] 14 STC 742 (SC); [1964] 2 SCR 888, the exemption was denied to the assessee on the ground that the intention of the notification was to avoi....