judgement:
N: Civil Appeals Nos.
2552 2556 of 1969.
(From the Judgment and Order dated 26.11.1968 of the Andhra Pradesh High Court in Case Referred No. 40/64 arising from R.A. Nos.
1709 1713/62 63).
B. Sen, S.P. Nayar for the Appellants.
K. Vasudeva Pillai, H.R. Puri and P.K. Pillai for the respondent.
The Judgment of the Court was delivered by BEG, J.
Civil 'Appeals Nos.
2552 2556 of 1969, are directed against a judgment of the Full Bench of the High Court of Andhra Pradesh.
The case was certified as fit under Articles 132 and 133 of the Constitution for an appeal to this Court.
The question involved, as framed in the Andhra Pradesh Case is, on the facts and circumstances of the present case are certain lands situated at Begum pet, Lalguda, Jaiguda, Subzimandi, Yerraguda, Zamboorkhana and Vicarabad, "agricultural lands" within the meaning of section 2(e) (i) of the Wealth Tax Act (hereinafter referred to as 'the Act ') ? If any of the lands mentioned above are agri cultural lands, as defined by the Act, they would be excluded from the definition of "assets" given in Section 2(e) of the Act, and, therefore, exempt from wealth tax.
Section 2(e) says: "2(e) 'assets ' includes property of every description, movable or imovable, but does not include XXX XXX XXX XXX (i) agricultural land and growing crops, grass or standing tress on such land;" The word 'agricultural land ' occurs in entries 86, 87 and 83 of List 1 to 7th Schedule of our Constitution relating to matters on which Parlia ment may legislate.
Entry 86 here says :" Taxes on the capital value of the assets, exclusive of agricultural land of individuals and companies; taxes on the capital of companies:" Entries 87 and 88 deal with Estate duty and duties of succes sion to property and each of them excludes agricul tural land from property on which 148 taxes may be levied by Parliament.
Entry 18 of List II giving subjects of exclusively state legis lation says: "Land, that is to say, rights in or over land, land, tenures including the relation of landlord and tenant, and the collection of.
rents, transfer and alienation of agricultural land; land improvement and agricultural loans; colonization.
" It is thus clear that "agricultural land" is only a species of land.
The main question before us is whether it should stand for all land which is capable of being utilised for agricultural purposes or for some land which either is being actually used or has been set apart or prepared for use for agricultural purposes so as to indicate the inten tion of the owner or occupier of the land to put it to agricultural uses.
This raises the further question:What is an agricultural purpose or agri culture ? The term "agriculture" was discussed very thoroughly by this Court in Commissioner of Income Tax, West Bengal, Calcutta vs Raja Benoy Kumar Sahas Roy.(1) This Court said there (at p. 472 473): "The term 'agriculture ' and 'agricultural purpose ' not having been defined in the Indian Income tax Act, we must necessarily fall back upon the general sense in which they have been under stood in common parlance. 'Agriculture ' in 'its root sense means ager, a field, and culture, cultivation, cultivation of a field which of course implies expenditure of human skill and labour upon land.
The term has, however, acquired a wider significance and that is to be found in the various dictionary meanings ascribed to it.
It may be permisible to look to the dictionary meaning of the term in the absence of any definition thereof in the relevant statutes.
" Therefore, this Court, beginning with the decision of Lord Coleridge in R.v. Peters(2), scanned and discussed various decisions of English and Indian Courts, and the meanings given in var ious dictionaries of the English language, as well as in the law dictionaries.
It then reached the conclusion (at p. 510): "If the term 'agriculture ' is thus understood as comprising within its scope the basic.
as well as subsequent operations in the process of agricul ture and the raising on the land of products which have some utility either for consumption or for trade and commerce, it will be seen that the term 'agriculture ' receives a wider interpretation both in regard to its operations as well as the results of the same.
Nevertheless there is present all throughout the basic idea that there must be at the bottom of it cultivation of land in the sense of tilling of the land, sowing of the seeds, plant ing, and similar work done on the land itself.
This basic conception is the essential sine qua non of any operation performed on the (1) [1957] 32 LT.R.p. 466 at 472 & 510.
(2) , 641.
149 land constituting agricultural operation.
If the basic operations are there, the rest of the operations found themselves upon the same.
But if these basic operations are wanting the subsequent operations do not acquire the characteristic of agricultural operations.
" In Raja Benoy Kumar Sahas Roy 's case (supra), the question before this Court was whether income from forest lands derived from sal and piyasal trees "not grown by human skill and labour" could constitute agricultural income.
The test applied there was whether there was some integrated activity which could be described as agricultural operation yielding income.
It was pointed out that, although, a mere wild or spontaneous growth of trees, not involving the employment of any human labour or skill for raising them, could not be agricultural income, yet, when there was a forest more than 150 years old, which had been carefully nursed and attended to by its owners, the income would be agricultural.
It is true that this case is not a direct authority upon what is "agricultural land.
" Nevertheless, it goes a long way in helping us to decide what could be agricultural land.
We think that this must be land which could be said to be either actually used or ordinarily used or meant to be used for agricultural purposes.
In other words, "agricultural land" must have a connection with an "agricultural user or purpose.
It is on the nature of the user that the very large number of definitions and authorities discussed by this Court, in Raja Benoy Kumar Sahas Roy 's case (supra), have a direct bearing.
In that case, this Court held that the wider meaning given to agri cultural operations, such as breeding and rearing of live stock, poultry farming, or dairy farming will not be ap plicable.
It held that the correct test to apply would be to find out whether human labour had been applied to the land itself, in order to extract from its natural powers, added to or aided by other natural or artificial sources of strength to the soil a product which can yield an income.
In the case before us, the question is a connected one.
Here also the term "agricultural land" has not been defined.
That, however, does not mean that the land to be considered can be divorced from its actual or natural or ordinary user.
If all land which is capable of being used for agriculture, could be intended to be excluded from "assets", practically every type of land, including that covered by buildings, would fall within that class.
Hence, it seems to us to be impossible to adopt so wide a test as would obviously defeat the purpose of the exemption given.
Apparently, agricul tural land is excluded from the definition of "assets" as it was.
thought that Parliament was not competent to impose taxes which will fall on agricultural land.
Whatever may be the reason for the exemption, we think that the exemp tion is connected with the user of land for a purpose which must be agricultural It is an enactment to tax "wealth" which includes all that is ordinarily understood as "assets". 'The person claiming an exemption of any proper ty of his from the scope of his assets must satisfy the conditions of the exemption.
150 It is true that, in Rain Benoy Kumar Sahas Roy 's case (supra), this Court pointed out that meanings of words used in Acts of Parliament are not necessarily to be gathered from dictionaries which are not authorities on what Parlia ment must have meant.
Nevertheless, it was also indicated there that, where there is nothing better to rely upon, dictionaries may be used as an aid to resolve an ambiguity.
The ordinary dictionary meaning cannot be discarded simply because it is given in a dictionary.
To do that would be to destroy the literal rule of interpretation.
This is a basic rule relying upon the ordinary dictionary meaning which, in the absence of some overriding or special reasons to justify a departure,.
must prevail.
Moreover, it was held there that the dictionary meanings.
of the word "agri cultural" were wider than what was meant by "agricultural income" as that term was used in the Income tax Act.
Even if we could give a wider connotation to the term "agricul tural" than the one it carries with it in the Income tax Act, we cannot dispense with credible evidence of at least appropriation or setting apart of the land for a purpose which could be regarded as agricultural and for which the land under consideration could be reasonably used without an alteration of its character.
This, we think, is the minimal test of "agricultural land" which should be applied in such cases.
In stating the facts of the case with regard to the Begumpet property, which, according to a rather surprising agreement between parties, was to be used for reaching an inference applicable to all other lands in the case, the High Court said: "The property at Begumpet was known as 'Begumpet Palace, Hyderabad. ' The buildings in this property were valued at Rs. 8,81,336/ while the vacant land comprising an area of about 108 acres was valued at Rs. 15,69,052.
The entire plot of land was enclosed in a compound wall and the various buildings inside it had their own compound walls.
The property is situated within the limits of the Hyderabad Municipal Corporation.
The land had never been actually used for agriculture, in the sense, that it had never been ploughed or tilled.
The property is situated adjacent to the tank known as "Hussain Sagar ' on the southern side, and there are two wells in the said land.
The land was capable of being used for agriculture and land revenue was being assessed and paid in respect of the said lands.
A portion of the land was acquired by the Government of Hyderabad on 15th September, 1955 and utilised by them for construc tion of buildings thereon.
" The High Court then stated the views of the taxing authorities as follows: "On these facts, the Wealth Tax Officer, came to ' the conclusion that the lands could not be treated as 'agricultural lands ' as no agricultural operations were carried on, in the sense of ploughing and tilling the land and raising any crop thereon.
The Appellate Assistant Commissioner, 151 confirms the order of the Wealth Tax Officer on this point.
The assessee preferred an appeal to the Income Tax Appellate Tribunal The Tribunal also took the view that the said land was never in.
tended to be used for agriculture and that the lands were never ploughed or tilled and that the lands were situated within the limits of the Hyd erabad Municipal Corporation and that the presump tion would be that they were not agricultural lands and that the said presumption was not rebutted, as no agricultural operations were ever carried on in the said land.
On this view, the Tribunal con firmed the order of the Appellate Assistant Commis sioner on this point.
" The High Court had discussed the various mean ings of the term "agriculture" and pointed out how it had acquired a wide sweep.
It also discussed a number of cases, including Sarojini Devi vs Srikrishna,(1) which had not been followed by a Division Bench of the Andhra Pradesh High Court in Manyarn Meenakshamma vs Commissioner of Wealth Tax A.P.(2) on the ground that the Madras view, that it was enough that the land was capable of being used for agricultural purposes, was no longer good law in view of the pronouncement of this Court in Raja Benoy Kumar Sahas Roys case (supra).
The Andhra Pradesh Division Bench had said in Smt.
Manyam Meenaksharnma 's case (supra) (at p. 544) : "We are inclined to agree with the observa tion of Hegde and Ahmed Ali Khan, JJ.
in Sri Krish na Rao L. Balekeai vs Third Wealth Tax Officer that the present characteris tics and not the potentialities of a land are the proper criterion.
If a land is ordinarily used for purposes of agriculture or for purposes subservient to or allied to agriculture, it would be agricul tural land.
If it is not so used, it would not be agricultural land.
The question how a land is ordinarily used would be one of fact depending on the evidence in each case.
If, for instance, an agricultural land, as we have interpreted above, is left fallow in a particular year owing to ad verse seasonal conditions or to some other special reason, it would not cease to be agricultural land.
" Apparently, the conflict between the views contained in Sarojini Devi 's case (supra) and in Smt.
Manyam Meenakshamrna 's case (supra), had led to a reference of the case to a larger bench.
The Full Bench of the Andhra Pradesh High Court, after discussing a number of cases of various High Courts, preferred the Madras High Court view, principally on two grounds: firstly, because as wide a connotation as was possible to give to the words, "agricultural land" was preferable in a taxing statute; and, secondly, because the entry to the large tract of vacant land in 'the Begumpet Palace in revenue records as assessable to land revenue raised a presumption of its agricultural character.
A.I.R. 1944 Mad. 401.
(2) at 544.
152 The Full Bench stated its conclusions on ques tions of law as follows: "(1 ) The words 'agricultural land ' occurring in Section 2(e)(i) of the Wealth Tax Act should be given the same meaning as the said expression bears in Entry 86 of List I and given the widest meaning: (2) The said expression not having been defined in the constitution, it must be.
given the meaning which it ordinarily bears in the English language and as understood in ordinary parlance: (3) The actual user of the land for agricul ture is one of the indicia for determining the character of the land as agricultural land: (4) Land which is left barren but which is capable of being cultivated can also be 'agricul tural land ' unless the said land is actually put to some other non agricultural purpose, like con struction of buildings or an aerodrome, runway, etc.
thereon, which alters the physical character of the land rendering it unfit for immediate culti vation: (5) If land is assessed to land revenue as agricultural land under the State revenue law, it is a strong piece of evidence of its character as agricultural land: (6) Mere enclosure of the land does not by itself render it a non agricultural land: (7) The character of land is not determined by the nature of the products raised, so long as the land is used or can be used for raising valu able plants or crops or trees or for any other purpose of husbandary: (8) The situation of the land in a village or in an urban area is not by itself determinative of its character.
" The Full Bench rejecting the effect of such features as construction of a Palace and the loca tion of the land within its compound said: "The land is of a large extent of 108 acres and abuts Hussain Sagar tank and has two wells in the land itself.
These indicate that the land possesses all the characteristics of agricultural land and that it is capable of being put to agri culture.
It is also not disputed that the land is vacant and has not been actually put to any purpose other than agriculture and that the physical character of the land is not such as to render it unfit for immediate cultivation.
The other rele vant fact is that the land has been admittedly assessed to land revenue as agricultural land under section 50 of the Hyderabad Land Revenue Act.
These factors in our opinion, strongly indicate that the land in question is agricultural land.
" 153 We think that it is not correct to give as wide a mean ing as possible to terms used in a statute simply because the statute does not define an expression.
The correct rule is that we have to endeavour to find out the exact sense in which the words have been used in a particular context.
We are entitled to look at the statute as a whole and give an interpretation in consonance with the purposes of the statute and what logically follows from the terms used.
We are to avoid absurd results.
If we were to give the widest possible connotation to the words "agricultural land", as the Full Bench of the Andhra Pradesh High Court seemed inclined to give to the term "agricultural land", we would reach the conclusion that practically all land, even that covered by buildings, is "agricultural land" inasmuch as its potential or possible use could be agricultural.
The object of the Wealth Tax Act is to tax surplus wealth.
It is clear that all land is not excluded from the definition of assets.
It is only "agricultural land" which could be exempted.
Therefore, it is imperative to give reasonable limits to the scope of the "agricultural land", or, in other words, this exemption had to be necessarily given a more restricted meaning than the very wide ambit given to it by the Andhra Pradesh Full Bench.
The Full Bench itself saw the need for some kind of limitation to the application of "widest purpose" principle, if one may call it that.
Therefore, evidently in an attempt to avoid the unreasonable conclusion to which too wide a definition of "agricultural land" would naturally lead to, the Full Bench.
, in the fourth conclusion recorded by it, held that, if some vacant land is actually built upon, it changes its physical characteristics and becomes unfit for immediate cultivation.
It thus qualified its view that the widest possible meaning must be given to "land".
Its final view was that only such land could cease to be agricultural land as had actually become unfit for immediate use for an agricultural purpose.
This view seems to imply that one has to start with the presumption that all "land", as such is "agricultural land".
If one were to start with such a pre sumption, (although, we must, in fairness to the views actually expressed by the Full Bench, observe that it did ' not expressly say so), even desert land will have to be first presumed to be agricultural land.
We feel certain that the Full Bench did not mean to carry the application of assumptions or principles, which seem to follow from its reasoning, so far as that.
Conclusions 6, 7 and 8 are only negative in character.
They merely indicated what could not be conclusive in decid ing whether the land was agricultural.
Conclusions 6 to 8, as stated above, would seem to be correct.
But, in our opinion, they do not carry us far in formulating a test of what is agricultural land.
Conclusion No. 5 seems to have been the real or positive test, based on entries in revenue records, actually adopted by the Full Bench for determining the nature the land.
The attempted application of the principles laid down by the Full Bench shows that what were treated as tests were really presumptions arising from the following facts: first ly, that the area was 108 acres abutting Hussain Sagar tank; secondly, that this land had two wells in 12 1003 SCI/76 154 thirdly, that it was capable of being used for agricul tural purposes; fourthly, that it had not been actually put to any use which could change the character of land by making it unfit for immediate cultivation; and, fifthly, that it was classified and assessed to land revenue as "agricultural land" under the provisions of the Andhra Pradesh Land Revenue Act 8 of 1317 Fasli perhaps on the assumption that it could be used for agriculture.
We may observe that the first four indicia set out above are based on absence of any user for non agricultural purposes.
Hence, they are inconclusive.
The last feature does seem to provide some evidence of the character of the land from the point of view of its purpose.
Section 50 of the Hyderabad Land Revenue Act (No. VIII of 1317F) (now called the Andhra Pradesh Land Revenue Act) lays down.
Land revenue shall be assessed accord ing to the various modes of use.
(a) Agricultural use.
(b) In addition to agricultural use any other use from which profit or advantage is derived.
When rate is assessed on any land for any one of the aforesaid purposes and the land is appropri ated for any other purpose the rate thereof shall be altered and fixed again, although the term of subsisting settlement may not have expired.
If any land granted by the Government with remission of land revenue for any special purpose is appropriated to some other purpose against the intention of the grant, the land revenue thereof shall be recovered.
It shall be lawful for the Taluqdar, and in case a taluqa is under settlement, for the Commis sioner of Survey Settlement or Commissioner of land Records after giving a hearing to the land holder to prohibit its appropriation for any particular purpose and record reasons therefor and to summari ly evict the holder who may have appropriated the said land to prohibited purpose".
Provisions of the Andhra Pradesh Land Revenue Act seem to involve quasi judicial proceedings, or atleast, an en quiry into the purposes for which land to be assessed has been appropriated.
The Full Bench of the Andhra Pradesh High Court has held these entries to be "strong prima facie evidence", and, it practically decided the case on the basis of these entries.
But, the difficulty seems to us to be that the taxing authorities had given a categorical finding that the land under consideration had neither been used for an agricultural purpose nor was it ever tended to be so used.
It may be that this finding was based on no evidence or was based on the circumstance that the land appeared to have been kept, as the environs of a huge palace, unused for any agricultural purpose.
It may be that the past history of such lands could give rise to some guess work that no agricultural user was intended by the owners of the Begum pet Palace.
But, is it possible to 155 reach a categorical finding or conclusion on the basis of general notion based on past history of the way in which such lands were treated by their aristocratic owners? At any rate, there presumably was sore possibly quasi judicial, enquiry at the time of classification of land "agricultural" under the provisions of Section 50 of the Andhra Pradesh land Revenue Act.
There must have been some evidence given such a classification.
Learned Counsel for the assessee respondents submitted that evidence had been led on the question of intended user before the Taxing authorities as the "prima facie evidence", provided by the entries in the revenue records, was consid ered enough.
It has, however to be 'remembered that such entries could raise only a rebuttable presumption.
It could, therefore, be contended that some evidence, should have been led before the Taxing authorities of the purpose intended user of the land under consideration before the presumption could be rebutted.
If the "prima facie" evi dence of the entries was enough for the assessee to dis charge his burden to establish an exemption, as it seemed to be, evidence to rebut it should have been led behalf of the Department.
We think that this aspect of the question was not exam ined by the Full Bench from a correct angle.
Although it seems to have based in conclusion primarily on the "prima facie" evidence provided by the entries under Section 50 of the Andhra Pradesh Land Revenue Act it had also used other indicia which were really not very helpful.
The had a bear ing on potentialities for agricultural user.
The Full Ben had, however, not recorded a finding that conclusion reached by the Taxing authorities, that the land was never even intended to be use for an agricultural purpose, rested on no evidence at all.
It had n given its reasons for rejecting this finding of the Tribunal.
We also think that the Full Bench was not correct in adopting view expressed in Sarojini Devi 's case (supra) by the Madras High Court where it was held that it was enough to show that the land under consideration was capable of being used for agricultural purpose This erroneous view also seems to us to have affected the conclusion of the Full Bench on what was essentially a question of fact.
It has led the Full Bench into giving excessive weight to consider ations which had a bearing only on potentialities of the land for use for agriculture purposes.
For the reasons already given, we do not think that the term "agr cultural land" had such a wide scope as the Full Bench appears have given it for the purposes of the Act we have before us.
We agree that the determination of the character of land, according to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of each particular case What is really required to be shown is the connection with an agricultural rural purpose and user and not the mere possibility of user of land by some possible future owner or possessor, for an agricultural purpose.
It is not the mere potentiality, which will only affect its valuation as part of "assets", but its actual condition and intended use which has to be seen for purposes of exemption from wealth tax.
On 156 the objects of the exemption seemed to be to encourage cultivation actual utilisation of land for agricultural purposes.
If there is neither anything in its condition, nor anything in evidence to indicate the intention of its owners or possessors, so as to connect it with an agriculal pur pose, the land could not be "agricultural land" for the purses of earning an exemption under the Act.
Entries in revenue ords are, however, good prima facie evidence.
We do not think that all these considerations were kept in view by the taxing authorities deciding the question of fact which was really for the assessing authorities to determine having regard to all the relevant evidence and law laid down by this Court.
The High Court should have sent the case to the assessing authorities for deciding the question of :t after stating the law correctly.
We think that this is a fit case in which we should set aside the judgment of the Full Bench of the High Court and hold that the tribute should determine afresh, from a correct angle, the question of fact ether any of the lands under consideration were "agricultural" or t for the purposes of the Act before it.
Accordingly, we allow these peals, set aside the judgment and order of the Full Bench and send the cases to the Tribunal for appropriate orders for giving opporpriate both sides to lead further evidence, if they so desire, and the decision of the cases in accordance with the law as declared w by this Court.
The parties will bear their own costs throughout.
P.S. Appeals allowed.

summary:
The assessee was the owner of more than 100 acres of land within municipal limits and enclosed by a compound wall.
The land was adjacent to a tank, had two wells in it, was capable of being used for agriculture, was assessed to land revenue as agricultural land, but had not been actually put to any non agricultural use.
The High COurt held that the land was 'agricultural land ' under section 2(e)(i) of the Wealth Tax Act, 1957 and exempt from wealth tax on the basis that, (1 ) the expres sion 'agricultural land ', not having been defined in the Act, must be given the widest possible meaning; (2) so interpreted, all land which is capable of being utilised for agricultural purposes would be 'agricultural land unless it is actually put to some non agricultural use like construc tion of buildings etc; and (3) the land has been assessed to land revenue as agricultural land under the State Revenue Law.
Allowing the appeal, HELD: It is only land, which either is being actually used or ordinarily used, or has been set apart or prepared for use for agricultural purposes so as to indicate the intention of the owner or occupier of the land to put it to agricultural use, that would be 'agricultural land '.
[156 A] (1 ) It is not correct to give.
the expression a wide meaning merely because the statute does not define it.
The correct rule is for the Court to endeavour to find out logically the exact sense in which the words have been used in a particular context, reading the statute as a whole, giving an interpretation in consonance with the purposes of the statute, and avoiding absurd results.
[153 A B] (2) The object of the Wealth Tax Act is to tax surplus ' wealth.
It is not all land but only 'agricultural land ' that is excluded from the definition of assets.
Therefore, it is imperative to give reasonable limits to the scope of the expression 'agricultural land '.
[153 C] (3) The determination of the, character of land, accord ing to the purpose for which it is meant or set apart and can be used, is a matter which ought to be determined on the facts of each particular case.
What is really required to be shown is the connection with an agricultural purpose and user, and not the mere possibility of user by some possible future.
owner or possessor.
for an agricultural purpose.
It is not the potentiality, but its actual condition and in tended user which has to be seen for purposes of exemption from wealth tax.
The correct test to apply would be to.
find out whether human labour had been applied to the land it self, in order to extract from its natural powers, added to or aided by other natural or artificial sources of strength, a product which can yield income.
If there is nothing in its condition, or in the evidence to indicate the intention of its owner or possessor, so.
as to connect it with an agricultural purpose, the land could not be agricultural land.
The person claiming that any property is exempt must satisfy the conditions of the exemption.
[155 G H] The extent of the land, its situation, that it was capable of being used for agricultural purposes and has not been actually put to any use which would make it unfit for immediate cultivation, .are, therefore, inconclusive being based on absence of user for non agricultural purpose.
Entries in revenue records are.
however, good prima facie evidence since they are based on some quasi judicial enquiry but they raise only a rebuttable presumption.
If such 147 pritma facie evidence was enough for the assessee to dis charge his burden to establish an exemption, evidence to rebut it should have been led on behalf of the Department.
In the present case, however, the High Court relied not only on the entries, but also on the inconclusive circumstances based on potentialities.
While doing so, the High Court did not hold that categorical finding of the taxing authorities and Tribunal that the land was never used, nor was intended to be used for an agricultural purpose did not rest on any evidence at all; nor did it give any reasons for rejecting the finding.
it is therefore a fit case for being remanded to the Tribunal for deciding the question of fact, after giving opportunity to both sides to adduce evidence.
[155 B E] C.I.T.W.
Bengal vs Raja Benoy Kumar (1957) I.T.R. 466, followed.
Sarojini Devi vs Raja Sri Krishno A.I.R. 1944 Mad. 401, overruled.


judgement:
TION: Criminal AppealNo.
21 of 1976.
(From the judgment and Order dated 20 8 1975 of the High Court of Madhya Pradesh in Misc.
Criminal Case No. 1010/75).
B. Sen, Mrs. A.K. Verma, 1.
B. Dadachanji, O.C. Mathur and R. Narain, for the appellant.
Nemo, for the respondents.
The Judgment of the Court was delivered by RAY, C.J.
This is an appeal under section 19(1)(b) of the referred to as the Act against the order dated 20 August,.
1975 of the High Court at Jabalpur convicting the appellant and sentencing him to suffer imprisonment till the rising of the Court under section 4 of the Act and to pay a fine of Rs. 100/ .
The High Court however accepted the apology of the appellant for the purpose of remitting the punishment under the proviso to section 12(1) of the Act and remitted the sentence and ordered the appellant to pay the paper book costs and to bear his own costs.
The appellant is a District Magistrate of District Rajnandgaon in Madhya Pradesh.
A detenu Vidya Bhushan Thakur challenged in the High Court by way of a habeas corpus petition the validity of his detention order passed by the appellant under section 3(1 )(a) of the .
On 1 August, 1975 the High Court directed the production of the detenu in court on 8 August, 1975.
On 5 August, 1975 the appellant received a telegram from the office of the Advocate General, Madhya Pradesh intimating the appellant the order of the High Court to produce the detenu Vidya Bhushan Thakur before the High Court on 8 August, 1975 in connection with the habeas corpus petition.
Immediately on receipt of the telegram from the office of the Advocate General the appellant communicated the same to the Superintendent, Central Jail, Raipur directing him to send the detenu to 100 Jabalpur under strong guard for his production before the High Court on 8 August, 1975.
The order was communicated to the Superintendent, Central Jail Raipur on the same day and accordingly the Superintendent, sent the detenu on 6 August, 1975 at 5.35 p.m. to Jabalpur and thereafter the detenu was duly produced in Court on 8 August, 1975.
The State Government had passed an order under section 268 of the Criminal Procedure Code which was published in the Official Gazette on 1 August, 1975.
The appellant referred the matter to the Home Secretary for clarification of .the notification vide a wireless message dated 6 August, 1975 as to whether the detenus under the are to.
be produced before the High Court in connection with the,habeas corpus petitions.
The appellant also spoke to the Government Advocate on 6 August 1975 and brought to his notice the above notifica tion of the State Government.
The Government Advocate in formed the appellant on telephone, that neither the Advocate General nor the ,High Court had so far received a copy of the said notification.
The appellant then informed the Government Advocate that he would be sending a copy of the said notification by wireless for information.
The appel lant despatched the wireless message to the Government AdVocate at Advocate General 's address quoting the notifica tion as received from the Government.
The wireless message quoted the.
notification and the request of the appellant to the Advocate General was as follows : "In the light of above Government Notifica tion he was requested to request the Court not to insist on the production of Vidya Bhushan Thakur as there is strong possibility of disturbance of public order if Vidya Bhusban Thakur is taken out from jail.
Kindly inform the Government regarding the action taken.
" On 6 August, 1975 after the telephonic conversation with the Government Advocate, the appellant again directed the Superintendent, Central Jail, Raipur to produce the detenu before the High Court on the date of hearing and informed the Advocate General that the detenu would be produced before the High COurt and the detenu was in fact produced before the Court.
The High Court took the view that the wireless message dated 6 August, 1975 addressed to the Advocate General with a copy to the.
Registrar of the High CoUrt amounted to an expression by the appellant of his inability to obey the order of the Court on account of the notification issued by the State Government published in the Official Gazette on 1 August, 1975.
The High Court ordered the appellant to show cause why he should not be committed for contempt in exer cise of the ' powers of the Court under Article 215 of the Constitution read with section 10 of the Act.
The appellant appeared before the High Court on 13 August, 1975.
The case was adjourned to 14 August, 1975 to enable the filing of a reply which was submitted in the form of an affidavit together with some enclosures.
The appel lant pleaded for the discharge of Rule 101 Nisi on the ground that no contempt of court was committed and that wireless message to the Advocate General did not constitute a contempt of court.
The High Court by order dated 20 August, 1975 found the appellant guilty of contempt by holding that the appellant had sent the wireless message dated 6 August, 1975 without waiting for reply from the State Government regarding the clarification of its Notification.
The appellant on 6 August, 1975 referred to the Home Secretary for clarification of the notification dated 1 August, 1975.
The appellant sent a copy of the notification to the Advocate General.
The appellant also directed the Superintendent, Central Jail, Raipur to produce the detenu before the Court.
The detenu in fact was pro duced before the High Court.
All these features indicate that the appellant throughout acted in a careful and re sponsible manner.
The reply of the Government to the clarification asked for by the appellant on 6 August, 1975 was received on 8 August, 1975, that is to say two days after the wireless message had been sent to the Advocate General.
The clarifi cation message of the Government reached the appellant in the afternoon of 8 August, 1975, viz., the date on which the detenu was to have been produced in court.
The State Govern ment in the note clarifying the position informed the appel lant that in case the appellant was advised to produce the detenu before the High Court and if the High Court insisted on such production the High Court should be informed well before the date on which the detenu is to be produced by an affidavit sworn by an officer in charge that there is danger to public order if the detenu as produced.
It appears that the appellant had acted just as the Government clarification suggested.
The appellant gave the notification to the Advocate General because the latter did not have it and asked for it.
The appellant asked for clarification from the State Government as to the notification because of the situation in which he was placed.
The appellant sent instructions to the Superintendent, Central Jail, Raipur to produce the detenu.
The detenu was produced before the High Court.
The appellant took all steps in good faith.
The appellant from the beginning gave directions for production of the detenu.
The High Court held that the affidavit of the appellant contained no reference to the telephonic talk with the Advocate General pursuant to which a telegram had been sent and therefore it was a false affidavit.
The High Court also held that sending a copy of the wireless message addressed to the Advocate General to the Registrar of the High Court for information amounted to an attempt to interfere with the order of the High Court.
The appellant sent a copy of the wireless message ad dressed to the Advocate General to the Registrar for infor mation only.
The appellant took all steps to produce the detenu even before the receipt of the clarification or advice by the State Government for production of the detenu before the High Court.
The appellant sent the wireless message to the Advocate General only to apprise him of the notification sent by the State Government.
The appellant sent that information inasmuch 102 as the Government Advocate had informed the appellant that neither the Advocate General nor the High Court was aware of the said notification issued by the State Government.
The appellant requested the Advocate General to request the Court not to insist on the production having regard to the public order which request was consistent with the direction of the State Government.
The absence of reference to the telephonic talk in the affidavit does not mean that no such talk in fact took place.
The appellant produced the telephone bill as well as the letter of the Advocate General to show that there was in fact a telephonic conversation.
The appellant communicated to the Advocate General in the discharge of his official duties the notification issued by the Government.
The appellant requested the Advocate General to request the High Court not to insist on the production.
The wireless.
mes sage was not addressed to the Court.
The original addressee was the Advocate General.
A copy was sent to the Registrar for information that such a telegram had been sent to the Advocate General.
The appellant tendered apology with grace and not as a coward.
The appellant produced the detenu.
The appellant at no stage interfered with any order of the High Court.
The appellant never showed any disobedience.
On the contrary the appellant acted in obedience to the order of the High Court.
The High Court accepted the apology for the limited purpose of remitting the punishment.
The order of the High Court cannot be sustaining in view of the tender of apology by the appellant as well as the production of the detenu.
The appeal is accepted.
The judgment and order of the High Court are set aside.
S.R. Appeal allowed.

dataset_name: IN-Abs

summary:
Pursuant to telegraphic information dated 5 August 1975 received from the Advocate General, Madhya Pradesh, communi cating the directions of the Jabalpur Bench of the, High Court of Madhya Pradesh dated 1 August 1975, for the produc tion of a detenu held under section 3(1)(a) of the MISA 1971 in the court on 8 August 1975; the appellant, a district Magistrate, instructed the Superintendent, Central Jail, Raipur, to send the detenu to Jabalpur under strong guard for his production before the High Court on 8 August 1975.
The detenu was duly produced in court on 8 August 1975.
While seeking a clarification from the Home Secretary, on the order passed by the State Government under section 268, Criminal Procedure Code, which was gazetted on 1 August 1975, as to whether the detenu, under the MISA is to be produced before the High Court in connection with the habeas corpus petition, the appellant also spoke to the Government advocate and the Advocate General about the notification.
Since they desired the copy of the notification, the appel lant despatched a wireless message to Advocate General as follows "In the light of the above notification, he was requested to request the court not to insist on the production of VBT as there is strong.
possibility of disturbance of public order if VBT is taken out from jail.
Kindly inform the Government regarding the action taken.
" A copy of the wireless message was endorsed to the respond ent by 'way of abundant caution.
Viewing this as amounting to an expression by the appellant of his inability to obey the order of the. court on account of the notification issued by the State, Government published in the official gazette on 1 August 1975, the High Court, in exercise of the powers of the court under article 215 of the Constitution read with section 10 of the Contempt of Court Act (Act No. 70 of 1971) ordered the appellant to show cause why he should not be committed for contempt, for which the appellant submitted his reply in the form of an affidavit pleading for the discharge of rule nisi on the ground that no contempt of court was committed and that the wireless message to the Advocate General did not constitute a contempt of court.
The High Court found the appellant guilty for contempt by holding that the appellant had sent the wireless message dated 6 August 1975 without waiting for the reply from the State Government regarding the clarification of its notifi cation, and convicted the appellant and sentenced him to.
suffer imprisonment till the rising of the court under section 4 of the Contempt of Court Act 1971 and to pay a fine of Rs. 100/ .
The High Court, however, accepted the apology of the appellant for the purpose of remitting the punishment under the proviso to section 12(1) of the Act and remitted the sentence and ordered the appellant to.
pay the paper book costs and to bear his own costs.
Hence the appeal under section 19(1)(b) of the Act.
Accepting the appeal to this Court, HELD: The order of the High Court cannot be sustained in view of the tender of apology by the appellant as well as the production of the detenu.[102 D] All these features, namely, referring to the Home Secre tary for clarification of the notification dated 1 August 1975, sending a copy of the said notification 99 to the Advocate General, directing the Superintendent, Central Jail, to produce the detenu before the court and the detenu, in fact, having been produced before the High Court indicate that the appellant throughout acted in a careful and responsible manner and took all steps in good faith.
[101 B CF] HELD FURTHER: In the instant case, the appellant from the.
beginning gave directions for production of the detenu.
wireless message was not addressed to the court, but to the Advocate General, only to apprise him of the notifica tion sent by the State Government so that a request may be made to the court not to insist on the production of the detenu in the interest of public order.
The copy thereof to the Registrar is for information only.
The absence.
of reference to the.
telephonic talk in the affidavit does net mean that no such talk in fact took place.
The appellant tendered apology with grace and not as a coward.
The appel lant at no stage interfered with any order of the High Court.
The appellant never showed any disobedience.
On the contrary, the appellant acted in obedience to the order of the High Court.
[101 F, G H, 1012 A D]


judgement:
Appeal No. 104 of 1970.
(From the Judgment and Order dated 23 10 1967 of the Patna High Court in Civil Writ Jurisdiction Case No. 299/66).
L.M. Singhvi, U.P. Singh and S.N. Jha, for the Appellant.
Sarjoo Prasad and U.S. Prasad, for the Respondent.
The Judgment of the Court was delivered by KHANNA, J.
The short question which arises for determi nation in this appeal on certificate by Damodar Valley Corporation against the judgment of Patna High Court dis missing the writ petition filed by the appellant is whether the appellant is liable to pay electricity duty under Bihar Electricity Duty Act,, 1948 as amended by Bihar Electricity Duty (Amendment) Act, 1963.
The High Court answered the question in the affirmative against the appellant.
The appellant is a corporation established under the for the development of the Damodar Valley in the States of Bihar and West Bengal.
One of the functions of the appellant is the promotion and operation of schemes for the generation, transmission and distribution of hydroelectric and thermal electrical energy.
Bihar Electricity Duty Act, 1948 (Bihar Act 36 of 1948) (hereinafter referred to as the principal Act) was published in the Bihar gazette; on October 1, 1948.
It was an Act for the levy of duty on the sales and consumption of electrical energy in the province of Bihar.
Material part of sec tions.
3 and 4,.
as they stood before the amendment made in 1963, read as under: "3. Incidence of duty. (1) There shall be levied and paid to the: State Government on the units of energy consumed or sold, excluding losses of energy in the transmission and transformation, a duty at the rates specified in the First Schedule: Provided that no duty shall be leviable on units of energy : (i) . . (ii) . (iii) . (iv) . . 120 (v) consumed by, or in respect of, or sold for consumption in any (a) mine, as defined in the Indian Mines Act, 1923: (b) industrial undertaking; except to the extent specified in the Second Schedule: (vi). (2) . 4.
Payment of duty. ( I ) Every licensee shall pay every month to the State Government at the time and in the manner prescribed the proper duty payable under section 3 on the units of energy consumed by him or sold by him to the con sumer.
(2) Every licensee may recover from the amount which falls to be paid by the licensee as duty in respect of energy sold to the consumer.
(3). . (4) . (4a) . (5) .
The principal Act was amended by Bihar Electricity Duty (Amendment) Act, 1963 (Bihar Act 20.
of 1963) (hereafter referred to as the amending Act).
The amending Act received the assent of the President on December 4, 1963 and was published on December 17, 1963.
By section 2 of the amending Act, new section 3 was substituted for the old section 3.
Material part of new section 3 read as under: "3.
Incidence of duty.(1) Subject to the provision of sub section (2), there shall be levied and paid to the State Government on the units of energy consumed or sold, excluding losses of energy in transmission and transformation, a duty at the rate or rates specified in the Schedule.
(2) No duty shall be leviable on units of energy (a) . (b) . (c) . (d) . (e) consumed by the Damodar Valley Corporation for the generation, transmission or distribution of electricity by that Corporation; (f) . (3) . 121 Amendment was also made in the First Schedule of the principal Act.
The relevant part of the sched ule read as 'under : THE SCHEDULE (See section 3.) RATES OF DUTY A. For a mine or an industrial under Such rateor rates taking, save in respect of its not exceeding 2 naya premises used for residential or paisa per unit of office purpose energy as may, from time to time, be fixed by the State Govern ment with the previ ous consent of the President, by order in this behalf".
In the writ petition the appellant prayed for quashing three notices dated February 10, 1965 issued by the Superintendent of Commercial Taxes Giridih as also his orders dated March 24 and 29, 1966.
By the impugned notices the Superintendent of Commercial Taxes called upon the appellant to show cause as to why penal action under the princi pal Act as amended,, should not be taken against the appellant for having failed to get itself registered under that Act.
The appellant was also called upon to apply for registration.
By the impugned orders the Superintendent of Commercial Taxes directed.
the appellant to pay electricity duty under the: Act as amended.
The case of the appellant was that it enjoyed immunity from payment of tax under clause (1) of article 288 of the Constitution.
No law satisfying the requirement of clause (2) of article 288, it was contended, had been made warranting the levy of such a duty.
The High Court repelled this contention, and we find no sufficient ground to take a different view.
Article 288 of the Constitution reads as under: "288(1) Save in so far as the President may by order otherwise provide, no law of a State in force immediately before the comencement of this Constitution shall impose, or authorise the imposi tion of, a tax in respect of any water or electric ity stored, generated, consumed, distributed or sold by any authority established by any existing law made by Parliament for regulating or develop ing any inter State river or river valley.
Explanation.
The expression 'law of a State in force ' in this clause shall include a law of a State passed or made before the commencement of this Constitution and not previously repealed,, notwithstanding that it or parts of it may not be, then in operation either at all or in particular areas.
(2) The Legislature of a State may by law impose or authorise the imposition of, any such tax as is mentioned in clause ( 1 ), but no such law shall have any effect unless it has, after having been reserved for the consideration of the President, received his assent; and if any such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority, the law shall provide for the previous consent of the President being obtained to the making of any such rule or order.
" 10 1003 SCI/76 122 Article 288 grants exemption from tax under any law of a State in respect of any water or electricity stored, gener ated, consumed, distributed or sold by any authority estab lished by any existing law or any law made by Parliament for regulating or developing any inter State river or river valley, except in certain cases.
According to clause (1) of the article, this exemption would not be available in respect of such tax imposed under any law of a State in force immediately before the commencement of the Constitu tion if the: President by order so provides.
Although the principal Act is a pre Constitution law, being an Act of 1948, no order was admittedly made by the President with drawing the exemption in respect of the appellant from levy of such, tax under the principal Act.
Indeed, there was no question of issue of any such order because the principal Act did not provide for the imposition of electricity duty upon a corporation like the appellant.
Clause (v) of the proviso.
to sub section (1 ) of section 3 of the principal Act expressly stated that no duty shall be leviable on units of energy consumed by, or in respect of, or.
sold for con sumption in any mine, as defined in the Indian Mines Act, or industrial undertakings, except to the extent specified in the Second Schedule.
The appellant is admittedly an industrial undertaking, and as such, was not liable.
to pay electricity duty under the principal Act.
The case of the respondentS is that the bar to the levy of the said duty was removed and the levy of the duty on the appellant was, put on a sound legal basis as a result of the amendment made.
in the principal Act by the amending Act of 1963.
The amending Act, we find, satisfies the require ments of clause (2) of article 288.
According to that clause, the legislature of a State may by law impose, or authorise the imposition of, any tax mentioned in clause (1) of that article, but no such law shall have any effect unless it has, after having been reserved for the consider ation of the President, received his assent; and if any such law provides for the fixation of the rates and other inci dents of such tax by means of rules or orders to.
be made under the law by any authority,, the law shall provide for the previous consent of the President being obtained to the making of any such rule or order.
The amending Act of 1963, as already mentioned, received the assent of the President before its publication.
The exemption which was granted to mines and industrial undertakings from payment of elec tricity duty under the principal Act was withdrawn under the amending Act, except to some extent with which we are not concerned.
The new schedule, substituted for the old sched ule by the amending Act, prescribed the rates of duty for mines and industrial undertakings, and it was provided that the rate of duty shall be such rate or rates not exceeding 2 naya paise per unit of energy as may, from time to time, be fixed by the State Government with the previous consent of the President, by order in this behalf.
It has been argued by Dr. Singhvi on behalf of the appellant that the scheme of article 288 is to grant general exemption from the levy of tax in respect of any water or electricity stored, generated, consumed, distributed or sold ' by any authority established by any, existing 123 law or any law made by Parliament for regulating or develop ing any inter State river or river valley.
If any law made by a State legislature, according to the submission, seeks the imposition of any such tax, such law should contain clear indication to that effect before it receives the assent of the President.
The amending Act of 1963, :ac cording to the learned counsel, did not contain any such indication.
This contention, in our opinion, is wholly devoid of force.
Under proviso (v) to section 3(1) of the principal Act, mines and industrial undertakings were exempt from levy of duty.
This exemption stood withdrawn as a result of, substitution of new section 3 for the old sec tion by the amending Act.
The new charging section 3 (1 ) roped in all industrial undertakings, including the Damodar Valley Corporation, for the purpose of levy of duty.
Clause (e) of sub section (2) of new section 3 which was introduced by the amending Act of 1963.
expressly granted exemption from levy of electricity duty on units of energy consumed by the appellant corporation for the generation, transmission or distribution of electricity by that corporation.
This provision.
containing express reference to the appellant corporation, clearly warrants the inference that in respect of units of energy not covered by clause (e) of sub section (2) of section 3 the exemption would not be available to the appellant.
The contention advanced on behalf of the appel lant that the amending Act did not contemplate or contain indication regarding the imposition of electricity duty upon the appellant is plainly untenable, for it would have the effect of Tendering clause (e) of sub section (2) of sec tion 3 to be wholly redundant.
The courts, it is well settled, should be loath to accept an argument which would have the effect of rendering redundant the provision of a statute.
Lastly, it has been argued that though there has been an amendment of section 3 of the principal Act by its substitu tion by a new section under the amending Act of 196.3, there has been no amendment of section 4 with the assent of the President.
As such, no liability to pay electricity duty can be fastened upon the appellant.
This submission too is bereft of force.
Section 3, as inserted by the 'amending Act of 19 '63, is the charging section.
According to clause (1) of that section, subject to the provision of sub section (2), there shall be: levied and paid to the State Government on the: 'units of energy consumed or sold, excluding losses of energy in transmission and transformation, a duty at the rate or rates specified in the Schedule.
The section thus deals with the incidence of duty, and makes it clear that such duty h.as.
to be paid on the units of energy consumed or sold and at the rate or rates specified in the schedule.
It is further made clear by the section that the duty is to be levied and paid to the State Government.
As the duty is to.
be levied on the units of energy consumed or sold, it would follow that the duty would have to be paid by the consumer or seller,, as the case may be.
Section 4 of the principal Act merely provides for the manner and mode of payment of the duty, and we find no substance in the conten tion that unless section 4 of the principal Act was also re enacted with the assent of the President, the liability for payment of duty cannot be fastened upon the appellant.
124 What is required by clause (2) of article 288 is that the law made by the State legislature for imposing or authorising the imposition of tax mentioned in clause (1) shall have effect only if after having been reserved for the consideration of the President, it receives his assent.
Another requirement of that clause is that if such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority, the law shall. provide for the previ ous consent of the President being obtained to the making of any such rule or order.
It is, however, not the effect of that Clause that even if the above mentioned two require ments are satisfied, the provisions which merely deal with the mode and manner of the payment of the aforesaid tax should also receive the assent of the President and that in the absence of such assent, the provisions.
dealing with the incidence of tax, which have received the assent of the President, would remain unenforceable.
Some other aspects were also dealt with by the High Court, but in the light of the view we have taken in the matter, it is not necessary to deal with those aspects.
The appeal consequently fails and is dismissed but in the circumstances without costs.
P.B.R. Appeal dis missed.

summary:
The proviso (v) to section 3(1) of the Bihar Electricity Duty Act, 1948 provided that no duty shall be leviable on units of energy consumed by, or in respect of, or sold for con sumption in any mine or industrial undertaking except to the extent specified in the Second Schedule.
In 1963 section 3 of the Act was amended and a new section 3 was.
substituted for the old section 3.
Sub section (2)(e) of the new section states that no duty shall be leviable on units of energy consumed by the Damodar Valley Corporation for the generation, trans mission or distribution of electricity by that Corporation.
Item A of the First Schedule, as amended in 1963 states that for a mine or an industrial undertaking the duty leviable shall be at such rate or rates not exceeding 2 naya paise per unit of energy fixed by the State Government with, the previous consent of the president.
The Amending Act re ceived the assent of the President.
In response to notices issued by the Superintendent of Commercial Taxes calling upon the appellant to pay elec tricity duty under the Act as amended, the appellant contended that it enjoyed immunity from payment of tax under cl.
(1) of article 288 of the Constitution, no law satisfying the requirement of cl.
(2) of article 288.
having been made.
warranting the levy of such duty.
The High Court dismissed the appellant 's writ petition.
Dismissing the appeal to this Court, HELD: (1) What is required by cl.
(2) of article 288 is that the law made by the State legislature for imposing, or authorising the imposition of tax mentioned in cl.
(1) shall have effect only if (i) after having been reserved for the consideration of the President, it receives his assent, and (ii) that if such law provides for the fixation of the rates and other incidents of such tax by means of rules or orders to be made under the law by any authority, the law shall provide for ,the previous consent of the, President being obtained to the making of any such rule or order.
It is, however, not the effect of that clause that even if these two requirements are satisfied, the provisions which merely deal with the mode and manner of the payment of the tax should also receive the assent of the President and that in the absence of such, assent, the provisions dealing with the incidence of tax, which have received the assent of the President, would remain unenforceable.
[123 H; 124 A B] (2) The contention of the appellant that the amending Act did not contemplate or contain any indication regarding the, imposition of electricity duty upon the appellant is plain ly, untenable, for it would have the effect of rendering section 3(2)(e) to be wholly redundant.
Under proviso (v) to section 3(1) of the Principal Act, mines and industrial undertakings were exempt from levy of duty.
This exemption stood with drawn as a result of substitution of new section 3 for the old section by the amending Act.
The new charging section 3(1) roped in all industrial undertakings, including the Damodar Valley Corporation, for the purpose of levy of duty.
Section 3(2)(e), introduced by the Amending Act of 1963, expressly granted exemption from levy of electricity duty on units of energy consumed by the appellant for the, generation, transmission or distribution of electricity by that Corpora tion.
This provision, containing express reference to the appellant Corporation, dearly warrants the inference that in respect of units of energy not covered by section 3(2)(e) the exemption would not be available to the appellant.
[123 A B] 119 (3) There is no substance in the contention that unless section 4 of the principal Act was also re enacted with the assent of the President, the liability for payment of duty cannot be fastened upon the appellant.
Section 3 of the Amending Act which deals with the incidence of duty makes it clear that such duty has to, be paid on the units of energy consumed or sold and at the rate or rates specified in the schedule.
As the duty is to be levied on the units of energy consumed or sold, it would follow that the duty would have to be paid by the consumer or seller as the case may be.
Section 4 of the.
principal Act merely provides for the manner and mode of payment of the duty.
[123 F G]


judgement:
Appeal No. 488 of 1975.
(Appeal by Special Leave from the Judgment and Order dated 24 9 1973 of the Calcutta High Court in Appeal from Original Order & No. 335/73).
172 Hardayal Hardy, for appellant No. 1.
K. Sen, S.K. Mehta, M. Qamaruddin and P.N. Puri, for respondent No. 2.
S.C. Manchanda, P.L. Juneja and S.P. Nayar, for respondents.
The Judgment of the Court was delivered by GUPTA, J.
The first appellant, performing Right Society Limited, (hereinafter called the Society) is a company incorporated under the (English) Companies Acts, 1908 and 1913, having its registered office at Copyright House, 33 Margaret Street, Cavendish Square, London a company limited by guarantee and having no share capital.
The Society is an association of composers, authors and publishers of copy right musical works established to grant permission for the performing right in such works. 'Performing right ' means the right of performing in public, broadcasting and causing to be transmitted to subscribers to a diffusion service, in all parts of the world.
The members of the Society are required to assign to the Society the performing right in their works, and the Society exercises and enforces on their behalf all rights and remedies in respect of any exploita tion of such works.
The Society collects royalties for the issue of licences granting such permission and distributes the royalties to the members of the society, namely, the composers, authors, music publishers and other persons having an interest in the copyright in proportion to the extent to which a member 's work is publicly performed or broadcast after a pro rata deduction of the expenses.
Arti cle 43 of, the Articles of Association of the Society pro vides that the business and operations of the Society shall be conducted and managed by a General Council, and Article 48 authorises the General Council to apply the receipts also for certain other purposes.
Article 48 reads as follows: "48.
The General Council may, before making any distri bution among the Members: (a) Apply out of the receipts such sums as it thinks proper or has agreed to contribute as : (i) Gratuities, donations, pensions and emolu ments to any Member or ex Member of the Society or any person at any time in the employment of the Society, or engaged in any business acquired by the Society, and the 'wives, widows, families and dependants of any such person; (ii) Contributions to any benevolent, pension or similar fund which may be established for the benefit of Members, ex Members or employees of the Society or their wives, widows, families or depend ants .
(b) Set aside out of the receipts such sums as it thinks proper as subscriptions, donations, loans, gifts other payments for any of the purposes for which powers is given by paragraphs (iii) and (iv) of Clause 3(f) of the Memorandum of Association, provided 173 that without the assent of the Society in General Meeting the aggregate of all such payment shall not in any one year exceed the sum of one thousand pounds and four thousand pounds 'under the provi sions of those paragraphs respectively.
(c) Set aside out of the receipts such sums as it thinks proper as a reserve fund to meet contingen cies, or for future distribution, or for repairing, improving and maintaining any of the property or premises of the Society and for such other purposes as the General Council shall in its absolute dis cretion think necessary or conducive to the inter ests of the Society, and may invest for the several sums so set aside in such investments as it may think fit, and from time to time deal with or vary such investments and dispose of all or any part thereof for the benefit of the Society, and may divide the reserve fund into such special funds as it thinks fit, and employ the reserve fund or any part thereof for the general purposes of the Socie ty, and that without being bound to keep the same separate from the other assets.
" On December 13, 1953 the Society entered into an agreement with the President of India owning and controlling broadcasting stations in India and organizing and conducting the same under the name of All India Radio (hereinafter referred to as the licensee) whereby the Society granted to the licen see the authority, (a) to broadcast from the licen see 's sound broadcasting stations in India all musical works included in the repertoire of the Society, and (b) to utilize, solely, for the pur pose of sound broadcasting as aforesaid, any origi nating performance of such musical works, irrespec tive of the source of such performance and the means whereby the such performance is conveyed to the point of broadcast transmission from the licen see 's stations.
The agreement was executed in England.
It may be stated here that previous to this agreement the parties had entered into a similar agreement in the year 1940.
The agreement of 1953 states that the licence granted thereby "shall be deemed to have come into force on April 1, 1949 and shall continue from year to year until determined by either party giving to the other three calendar months ' notice in writing to expire on March 31 in any year".
The agreement provides that the licensee shall send to the Society at its registered office in London, the lists of all musical works broadcast in each week during the term of the licence from each of the licensee 's main stations (Delhi, Bombay, Calcutta and Madras) and the external services, and requires the licen see to furnish a return after the first day of April every year during the period of licence, stating the agreegate number of hours occupied during the period ended on the previous 31st March, in broadcasting Western music from each of the licensee 's main and external Service Stations.
The agreement further provides that for the rights granted, the licensee will pay to the Society annually a sum calculated at the rate of 2 (Two pounds) per hour of broadcasting Western music from each of the licensee 's 174 main and external Service Stations and that such annual payments must be made to the Society in London.
The second appellant, M/s. Natsin India Private Limited is a private limited company incorporated under the (Indian) Companies .Act having its office at 26, Chowringhee Road, Calcutta.
The second appellant was appointed by the Society to be its lawful attorney in India by virtue of a power of attorney granted by the Society to the, second appellant in July, 1967.
As agent in India for the Society, the second appellant realises on its behalf royalties from cinema houses and other sources where music over which the Society has copyright is played in this country, and has, inter alia, the power to commence and prosecute suits and other proceedings, engage lawyers, and sign plaints, petitions etc.
Prior to July, 1967 the Society, a non resident company, used to file its returns of income before the Income tax Officer, Madras, through its former agent in India, M/s. Vernon and Company of Madras.
The royalties or fees realised from the licensee were not included in its returns for the assessment years 1947 48 to 1950 51.
Later, the .Income tax Officer, Madras, issued notices under section 34(1) of the Income Tax Act, 1922 and assessed the said income after deducting the proportionate administrative ex penses.
The appeals taken by Vernon and Company against the supplementary assessment orders for the aforesaid years were dismissed by the Appellate Assistant Commissioner, Madras.
The matter rested there and the Society had been paying tax on its income in India including the income from royal ties.
received from the licensee without objection until the assessment year 1967 68 for which the accounting year ended December 31, 1966.
In the said assessment year also the Income tax Officer, Companies Circle L(II), Madras by his order dated October 23, 1963 assessed the total income of the Society treating the income arising out of the agreement with the licensee as chargeable as was being done all these years.
Against this order of assessment, the Society through the second appel lant made a revisional application under section 264 of the Income Tax Act, 1961 (hereinafter re ferred to as the Act) to the Commissioner of In come tax, West Bengal, where the Society 's income tax file had been transferred in the meantime.
The Additional Commissioner of Income tax who dealt with the application dismissed the same by his order dated July 18, 1970.
The Society then moved a writ petition before the Calcutta High Court chal lenging the order of the Additional Commissioner of Income tax.
A rule nisi was issued on the petition by a learned Judge of the High CoUrt but ultimately the rule was discharged and the petition was dis missed.
On appeal by the Society, a Division Bench of the High Court affirmed the view taken by the learned single Judge and dismissed the appeal on September 24, 1973.
In this appeal by special leave the appellants question the correctness of that decision and challenge the order of assessment on two grounds: (1 ) the agreement between the Society and the Licensee having been executed in England and the royalties being also payable in England, the income out of this agreement is not liable to be taxed in India; 175 (2) the Society being under an obligation to distribute the income to its members, the royalties realised are not really the income of the Society.
The first point seems to be covered by the provi sions of section 5(2) (b) of the Act.
Section 5(2) reads as follows: "5.
Scope of total income: (1) x x x (2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non resident includes all income from whatever source derived which (a) is received or is deemed to be received in India in such year by or on behalf of such person; or (b) accrues or arises or is deemed to accrue or arise t0 him in India during such year.
Explanation 1 .
Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India.
Explanation 2.
For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included on the basis that it is received or deemed to be received by him in India .
" The Society is a non resident company, and though it receives the income out of the agreement execut ed not in India but in England, the income undoubt edly accrues or arises in India.
On behalf of the appellants it was contended that the source of income was really the agreement which was entered into in England.
We do not think that the question as to the source of the income is relevant because subsection (2) of section 5 provides that all income "from whatever source derived" is to be included in the total income of the non resident assessee if the income accrues or arises in India during the relevant year.
Reference was also made to section 9 of the Act which enumerates the in comes that shag be "deemed to accrue or arise in India" though actually accruing elsewhere, to establish that the income in question could not be deemed to accrue or arise in India.
But the income in this case has in fact accrued in India and no question arises whether it should be "deemed" to accrue or arise in India. 'Whether a certain income accrued or arose in India within the meaning of section 5(2) is a question of fact "which should be looked at and decided in the light of commonsense and plain thinking" as the Calcutta High Court considering a similar question under section 4(1) 176 of the Income Tax Act, 1922 observed.(1) In the case before us the High Court and the income tax authorities considered it a hard matter of fact that the income derived from broadcast of copyright music from the stations of All India Radio arose in India.
In our opinion this was the correct view to take and we find no reason to differ from it.
The next question is whether the income from the royalties was the Society 's own income.
It was Contended on the authority of Raja Bejoy Singh Dudhuria vs Commissioner ofIncome Tax, Bengal,(") that the obligation to disburse the sum among its members diverted the income from the Society to the members, and it could not be called the income of the Society.
In Bejoy Singh Dudhuria 's case there was a decree of the court charging the appellant 's whole resources with a specific payment to his step mother, the Privy Council held that the decree had to that extent diverted his income from him and directed it to his step mother, and that to that extent what he received for her was not his income.
But where payments are made by the assessee after he has received the income as his, the position is different.
This was pointed out by the Judicial Committee in a later case, P.C. Mullick and another (Executors)v.
Commissioner of Income tax, Bengal,(1) where the executors in accordance with the directions in the will had paid Rs. 5,537/ to the person who performed the testator 's addya Sradh, and another sum of Rs. 1,25,000/ for pro bate duty out of the income of the estate.
It was held that this was not a case in which a portion of the income was by an overriding title diverted from person who would otherwise have received it as in Bejoy Singh Dudhuria 's case but it was "simply a case in which the executors having received the whole income of the estate apply a portion in a particular way pursuant to the directions of their testator, in whose shoes they stand".
The true test for the application of the rule of diversion of income by an overriding title has been explained by this Court in Commissioner l,come tax, Bombay City vs Sitaldas Tirathdas(4) "In our opinion, the true test is whether the amount sought to be deducted, in truth, never reached the assessee as his income.
Obligations, no doubt, there are in ever), case, but it is the nature of the obligation which is the decisive fact.
There is a difference between an amount which a person iS obliged to apply out of his income and an amount which by the nature of the obligation .cannot be said to be a part of the income of the assessee.
Where by the obligation income is diverted before it reaches the assessee, it is deductible; but where the income is required to be applied to discharge an obligation after such income reaches the assessee, the same consequence, in law, does not follow.
It is the first kind of payment which can truly be excused and not the second.
The second payment is merely an obligation to pay another (1) In the matter of V. G. Every.
(1937) 5 I.T.R. 216 (Coskello J.) (2) (3) (4) (pp. 374 375).
177 a portion of one 's own income, which has been received and is since applied.
The first is a case in which the income never reaches the assessee, who even if he were to collect it, does so, not as part of his income, but for and on behalf of the person to whom it is payable.
" On the facts of the present case it is clear that the royalties payable by the licensee under the agreement are realised by the Society as its income; Article 48 of the Society 's Articles of Association puts the matter beyond doubt.
Out of the receipts are deducted the expenses and also such other sums as in the discretion of the General Council should be set aside for the purposes men tioned in Article 48.
This is a case where the assessee having received the income applies it in a particular way; it is not a case of diversion of income by an overriding charge.
The appeal is accordingly dismissed.
There will be no order as to costs.
P.B.R. Appeal dismissed.

summary:
The appellant Society which is an association of compos ers, authors and publishers of copyright musical works was incorporated under the English Companies Act, 1908 and 1913 with its registered office in London.
It collects royalties for the issue of licences, granting permission for performing right in the works of its members and distributes the royalties to its .members.
The Society entered into an agreement in England with the President of India by which it granted to the All India Radio (the licensee) authority to broadcast from its sound broadcasting stations in India the.
musical works of the Society.
Under the agreement the licen see had to pay in England annual licence fee payable to the Society.
The appellant contended (i) that the agreement between the appellant and the licensee having been executed in England and the royalties being also payable in England, the income out of this agreement was not liable to be taxed in India and (ii) the Society being under an obligation to distribute the income to its members, royalties realised are hot really income of the Society.
Rejecting the contentions, HELD: (1)(a) Whether a certain income accrued or arose in India within the meaning of section 5(2) is a question of fact "which should be looked at and decided in the light of commonsense and plain thinking.
" The Society is a non resident company and though it received the income: out of the agreement executed, not in India but England, the income undoubtedly accrued or arose.
in India.
[175H and F] (b) The question whether the agreement is the source of the income is not relevant because section 5(2) provides that all income "from whatever source derived" is to be included in the total income of the non resident assessee if the income accrues or arises in India during the relevant year.
The income in this case had infact accrued in India and by virtue of section 9 no question arises whether it should be "deemed" to.
accrue or arise in India.
[175 G] In the matter of V.G. Every: (19 '37) approved.
(2) Article 48 of the Society 's Articles of Association shows that the royalties payable by the licensee under the, agreement are realised by the Society as its income.
Out of the receipts are deducted the expenses and also such other sums as in the discretion of the General Council should be set aside for the purposes mentioned in that article.
This is a case where the assessee having received the income, applies it in a particular Way; it is not a case of diver sion of income by an overriding charge.
[177 C] Raja Bejoy Singh Dudhuria vs Commissioner of Income tax, Bengal , P.C. Mullick and another (Executors) vs Commissioner of Income tax, Bengal and Commissioner of Income tax, Bombay City vs Sitaldas Tirathdas (pp.
374 375) dis tinguished.


judgement:
ivil Appeal Nos.
150 1542 of 1971.
(From the Judgment and Order dated 18 12 1969 of the Allahabad High Court in Income Tax Reference No. 328/64).
G.C. Sharma, P.L. Juneja and S.P. Nayar, for the Appel lant.
S.C. Manchanda, V.C. Prashar & Ujjal Singh, for the Respondent.
203 The Judgment of the Court was delivered by KHANNA, J.
These three appeals on certificate by the Commissioner of Income tax are against the judgment of the Allahabad High Court whereby the High Court answered the following question referred to it under section 66(1) of the Indian Income tax Act, 1922 (hereinafter referred to as the Act) in favour of the assessee respondent and against the revenue: "Whether in the facts and circumstances of the case, the assessee is entitled for each of the years under consideration to the exclusion from the income under the head 'property ' of an amount equal to the irrecoverable rent of the Grand Hotel property for one year which has not been so excluded in the preceding assessments ?" The matter relates to the assessment years 1957 58, 1958 59 and 1959 60.
The assessee is the owner of a build ing known as Grand Hotel in Civil Lines Delhi.
The income from this building was assessed from year to year under section 9 of the Act as income from property.
Subsequently there was a dispute between the assessee and her tenant.
Protracted litigation followed and ultimately a compromise was reached between the assessee and the tenant as per compromise deeds dated December 8, 1954 and July 9, 1955.
According to the assessee:, a total amount of Rs. 1,85,892 representing rent due on account of Grand Hotel became irrecoverable from the tenant.
At the time of the assessment year 1956 57 the assessee was able to secure deduction under item No. 38 of the Government of India notification No. 877F dated March 21, 1922 as regards unrealised rent in previous years.
The assessee made similar claims for deduction at the time of the assessment for the years 1957 58, 1958 59 and 1959 60.
The claim was not specifically made before the Income tax Officer but was made in appeal before the Appellant Assistant Commissioner.
The Appellate Assistant Commissioner declined to entertain the claim made at such a late stage.
When the matter went up before the Tribunal in further appeal, the Tribunal permitted the assessee to raise that point before it.
It was then urged on behalf of the department that in view of the deduction made for the assessment year 1956 57, no further deduction could be claimed by the assessee for the subsequent years.
This contention advanced on behalf of the department was not accepted by the Tribunal.
The Tribunal took the view that the claim could properly be made for the deduction in the assessment for the three years with which we ale con cerned in spite of the fact that such claim had been allowed in assessee 's favour in the year 1956 57.
On this view the Tribunal directed the Income tax Officer to compute the total rent which had become irrecoverable in respect of Grand Hotel property.
The Tribunal further directed that to the extent the irrecoverable rent had not been exempted in the previous assessment for 1956 57 should be exempted during the year under appeal in so far as income from property was concerned.
On application filed by the Commissioner of Income tax the question reproduced above was referred to the High Court.
The High Court, as stated above, answered the question in the affirmative in favour of the assessee.
204 In appeal before us Mr. Sharma on behalf of the appel lant has assailed the judgment of the High Court.
As against that, Mr. Manchanda on behalf of the assessee respondent has canvassed for the correctness of the view taken by the High Court.
Before dealing with the contentions advanced before us, it would be appropriate to refer to the relevant provisions on the subject.
Section 9 of the Act deals with tax pay able under the head "Income from property".
According to that section, the tax shall be payable by an assessee under the head "Income from property" in respect of the bona fide annual.
value of property consisting of any buildings or lands appurtenant thereto of which he is the owner, other than such portions of such property as he may occupy for the purposes of any business, profession or vocation carried on by him the profits c,f which are assessable to tax, subject to certain allowances.
These allowances have been speci fied in section 9, but for the purpose of present appeals it is not necessary to .refer to them. "Annual value" any property, for the purpose of section 9, shall, according to subsection (2) of that section, be deemed to be the sum for which the property might reasonably be expected to let from year to year.
Subsection (2) is followed by a number of provisos, but we are not concerned with them in these ap peals.
Section 60 of the Act empowers the Central Govern ment to make exemptions.
According to the section, the Central Government may, by notification in the Offi cial .Gazette,, make an exemption, reduction in rate or other modification, in respect of income tax in favour of any class of income, or in regard to the whole or any part of the income of any class of persons.
In exercise of the powers conferred by the above section the Central Government issued notification No. 878F dated March 21, 1922.
Item 38 of that notification reads as under: "The following classes of income shall be exempt from the tax payable under the said Act: (38) Such part of the income in respect of which the said tax is payable under the head 'property ' as is equal to the amount of rent payable for a year but not paid by a tenant of the assessee and so proved to be lost and irre coverable, where (a) the tenancy is bona fide; (b) the defaulting tenant has vacated or steps have been taken to compel him to vacate the property; (c) the defaulting tenant is not in occupation of any other property of the assessee; (d) the assessee has taken all reasonable steps to substitute legal proceedings for the recovery of the unpaid rent or satisfies the Income tax Officer that legal proceedings would be useless; and 205 (e) the annual value of the property to which the unpaid rent relates has been included in the assessee 's income of the year during.
which that rent was due and income tax has been duly paid on such assessed income.
" Section 9 of the Act makes provision for computation of income from property on a notional basis.
According to this section, the income shall be taken to be the bona fide annual value of the property.
In making the computation, certain allowances which are mentioned in section 9 would have to be deducted.
In case the property in question was in occupation of a tenant, the taxing authorities have, while computing the income from that property, to take: into account its bona fide annual value.
The questions to wheth er the tenant who was in occupation of the property has,.
in fact, paid the rent or not would not enter into considera tion at that stage, unless it be found that the rent due from the tenant has become irrecoverable.
The fact that the rent due from the tenant has become irrecoverable would in a majority of cases be known only in subsequent years and not in the year during which the tenant has remained in occupa tion.
None of the clauses dealing with allowances which are permissible under section 9 (1) of the Act deal with rent due from a tenant which remains irrecoverable.
It was to meet such an eventuality that exemption was granted as per item No. 38 in notification No. 878F dated March 21, 1922.
Item 38 exempts from payment of tax such part of the income in respect of which tax is payable under the head 'property ' as is equal to the amount of rent payable for a year but not paid by a tenant of the assessee and so proved to be lost and irrecoverable.
In order to claim the benefit of the above exemption, the assessee has also to show that the requirements of clause (a) to (e) of item 38 have been satisfied.
It was not disputed before the High Court that conditions mentioned in clauses (a) to (e) of item No. 38 had been fulfilled in the instant case.
The dispute between the parties centres on the point as to whether in the event of the amount of the irrecoverable rent being more than the amount of rent payable for a year, the assessee can claim the deduction only in one year equal to the amount of rent payable for a year, or whether the assessee can claim deduc tions for the balance of the irrecoverable rent in subse quent years also.
In other words, the question is whether in the event of the amount of irrecoverable rent being more than the amount of the rent payable for a year of the property, the assessee can claim the benefit of the exemp tion mentioned in item 38 only once or whether the assessee can claim the benefit of that exemption in successive years also till such time as.
the assessee gets relief in respect of the whole of the amount of irrecoverable rent.
Both the Tribunal and the High Court took the view that it would be permissible to claim the benefit of the exemption in succes sive years.
After hearing the learned counsel for the parties, we find no cogent ground to take a different view.
The language of item 38 which has been reproduced above shows that if other conditions.
are satisfied, the deduc tion which can be claimed by the assessee at an assessment cannot exceed the amount of 206 rent payable for a year.
The item thus places a limit in respect of the deduction which is permissible in an assess ment for one year.
In case, however, the amount of irrecov erable rent exceeds the amount of rent payable for a year, the right of the assessee to claim the benefit of the above exemption does not, in our opinion, get exhausted by his having claimed exemption in one year.
We land no cogent reason as to why the assessee should become disentitled to claim the benefit of the above exemption in respect of the balance of the irrecoverable rent in subsequent years sub ject to the condition that in no year the deduction would exceed the amount of rent payable: for a year.
the asses see, it has to be borne in mind, seeks exemption in respect of the notional rental income which he, in fact, never received but on which he had in terms of section 9 of the Act to pay tax.
The underlying object of the exemption granted by item 38 is that the assessee shall be entitled to claim deduction 'under the head 'property ' in respect of the notional rental income which, it subsequently so transpires, was never received by him but on which he had to pay tax.
Although item 38 fixes the limit of deduction which is permissible in one year, there is nothing in the language of that item to warrant the inference that the benefit of the exemption can be claimed only once.
There is also nothing in the language of that item to indicate that in respect of the balance of the irrecoverable rent, no relief is permissible even though tax on that balance amount too has been paid by the assessee.
It is well settled that there is no equity about tax.
if the provisions of a taxing statute are clear and unambiguous, full effect must be given to them irrespective of any consideration of equity.
Where however the provisions are couched in language which is not free from ambiguity and admits of two interpretations, a view which is favourable to the subject should be adopt ed.
The fact that such an interpretation is also in conso nance with ordinary notions of equity would further fortify the court in adopting such a course.
Mr. Sharma has invited our attention to the judgment of the Punjab High Court in the case of Daljit Singh v Commissioner of Income tax Delhi(1) wherein the Punjab High Court took a different view.
For the reasons stated above,.
we prefer the view taken by the Allahabad High Court in the judgment under appeal to that of the Punjab High Court in Daljit Singh 's case.
The appeal consequently fails and is dismissed with costs.
One hearing fee.
P.B.R. Appeal dis missed.
(1) 52 33.

summary:
While assessing the income of the assessee under the head 'property ' the Income Tax Authorities allowed for one year.
deduction of a part of a large sum of unrealised rent but rejected the claim for exclusion of the remainder during the three subsequent assessment years.
Before the Tribunal the authorities contended that no deduction could be claimed by the assessee for more than one assessment year.
The Tribu nal held that to the extent the irrecoverable rent had not been exempted in the previous assessment year, should be exempted in the subsequent years from the income from property of the assessee.
The High Court answered the refer ence in favour of the assessee.
Dismissing the appeal to this Court, HELD: There is no reason why the assessee should become disentitled claim the benefit of the exemption in respect of the balance of the irrecoverable rent in subsequent years subject to the condition that in no 'year the deduction would exceed the amount of rent payable for a year.
[206 B] Section 9 of the Indian Income Tax Act, 1922 provides for computation of income from property on a notional basis.
While computing the income from the property the tax Author ities have to take into account its bona fide annual value.
The fact that the rent due from the tenant had become irre coverable would be known only in subsequent years.
Section 9(1) of the Act does not deal with deductions in respect of irrecoverable rent.
Item 38 in Notification No. 878F dated March 21, 19.22 exempts from, payment of tax such part of the income in respect of which tax is payable under the head 'property ' as is equal to the amount of rent payable for a year but not paid by a tenant of the assessee and so proved to be lost and irrecoverable.
[205 B D] The underlying object of the exemption granted by item 38 is that the assessee shall be entitled to claim deduction under the head 'property ' in respect of the notional rental income which, it subsequently so transpires, was never received by him but on which he had to pay tax.
Although item 38 fixes the limit of deduction which is permissible in one year, there is nothing in the language of that item to warrant the inference that the benefit of the exemption can be claimed only once.
There is also nothing in the language of that item to indicate that in respect of the balance of the irrecoverable rent.
no relief is permissible even though tax on that balance amount too had been paid by the asses see.
[208 C D] Daljit Singh vs Commissioner of Income tax, Delhi, not approved.