TaxTMI 
TaxTMI 
1933 (7) TMI 18
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....able under the said Act, namely- "the profits of any co-operative society other than the Sanikatta Salt Owners' Society in the Bombay Presidency for the time being registered under the Co-operative Societies Act, 1912 (II of 1912), the Bombay Co-operative Societies Act, 1925 (Bombay Act VII of 1925), or the Burma Co-operative Societies Act, 1927 (Burma Act VI of 1927), or the dividends or other payments received by the members of any such society on account of profits." The Income-tax Officer determined the assessee's total income for the year of assessment 1932-33 to be as follows: I. Income from Securities- Rs. A.P. Rs. A.P. Rs. A.P. Tax Free ... 135 0 0 T....
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.... 1462 0 0 8,600 12 2 Deduct-Honoraria to Secretary, etc. 1,960 0 0 6,640 0 0 Profits of Co-operative Credit Society, in whole rupees ... ... ... 6,641 0 0 10,802 0 0 IV. Income from other sources: Bank interest ... ... ... 835 0 0 Total income ... 11,637 0 0 Income-tax was assessed upon heads I, II and IV, of the assessee's income upon the ground that such income was not part of the "profits" of the assessee exempted from income-tax under t....
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.... on securities (see Income-tax Manual, 1923, p. 77, and Income-tax Manual, 1932, p. 146) and as Lord Macnaghten observed in connection with the Income-tax Act in England: "I cannot help reminding your Lordships, in conclusion, that the Income-tax Act is not a statute, which was passed once for all. It has expired, and been revived, and re-enacted over and over again; every revival and re-enactment is a new Act. It is impossible to suppose that on every occasion the legislature can have been ignorant of the manner in which the tax was being administered by a department of the State under the guidance of their legal advisers, especially when the practice was fully laid before Parliament in the correspondence to which I have referred.....
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.... Judicial Committee of the Privy Council in Commissioner of Income-tax Bengal v. Shaw Wallace & Co. AIR 1932 PC 138 at p. 1350 (of 59 Cal.): "The object of the Indian Act is to tax "income," a term which it does not define. It is expanded, no doubt into "income, profits and gains," but the expansion is more a matter of words than of substance. Income, their Lordships think, in this Act, connotes a periodical monetary return "coming in" with some sort of regularity or expected regularity from definite sources. The source is not necessarily one which is expected to be continuously productive, but it must be one whose object is the production of a definite return, excluding anything in the nature of a mere windfall. Thus income has be....
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....re; "the surplus by which the receipts from the trade or business exceed the expenditure necessary for the purpose of earning those receipts: per Lord Hershell in Russell v. Town and County Bank [1883] 2 Tax Cas. 321 , Alianza Co. Ltd. v. Bell [1904] 2 KB 666 and Naval Colliery Co. Ltd. v. Commissioners of Income-tax [1928] 12 Tax Cas. 1017." In my opinion, the term "profits" in the notification of 25th August, 1925, is used in this latter sense, and prima facie there fore neither interest from securities nor income derived from property are "profits" within the meaning of that term as used in the notification. The learned Government Advocate on be half of the Commissioner of Income-tax contended that as the income derived from investmen....