TaxTMI 
TaxTMI 
1958 (12) TMI 48
X X X X Extracts X X X X
X X X X Extracts X X X X
....ome aforesaid computed in the manner laid down in the Income Tax Act?" 2. The relevant facts are these : The assessee is a chartered accountant. During the accounting year which ended on 31-12-1950 the assessee earned ₹ 31,006/- from the practice of his profession, he received also a further income of ₹ 741 from other sources, making a total of ₹ 31,747/-. He incurred a loss of ₹ 15,598 in respect of the properties that he owned. The result was that his total net income for the year was only ₹ 16,149. The assessee claimed that he was entitled to earned income relief under Section 15-A of the Income Tax Act in respect of ₹ 31,006, which was the income he received from the practice of his profession,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....#39;'In making any assessment for the year ending on the 31st day of March, 1951, there shall be deducted from the total income of an assessee, in accordance with the provisions of Section 15-A of the Income Tax Act, an amount equal to one-fifth of the earned income, if any, included in his total income, but not exceeding in any case four thousand rupees.'' Clause (15) of Section 2 of the Income Tax Act, defines the expression "total income" in these terms : " 'Total income' means total amount of income, profits and gains referred to in Sub-section (1) of Section 4 computed in the manner laid down in this Act....." It will be noticed that Section 15-A is general in its terms and merely enacts that....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d in itself. In the third case, it will certainly be inappropriate to say that earned income is included in the total income because it is smaller than the earned income, and, obviously the smaller cannot include the larger. The fourth case further emphasises this inappropriateness. It will thus be seen that the words used in Section 15-A of the Income Tax Act and Section 2 (2) of the Finance Act of 1950 are no: very felicitous. 6. Since the concept of total income is larger than the concept of earned income it was probably assumed without subjecting the matter to detailed analysis that the total income of an assessee would always be larger than his earned income. Whether this was so or not, the intension appears to have been to provide r....