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Report No. 49

16. Construction placed on the expression "income".-

For example, a wide construction has been placed on the expression "income" (in the Union List, entry 82), so as to enable the legislature to provide, by law, for the prevention of evasion of income-tax.1-2-3-4

Thus, the validity of section 23A, Income-tax Act, 1922, which provided for super tax on the undistributed income of certain companies,12 has been upheld.5

The validity of sections 2(6A)(e) and 12(1B) of the Income-tax Act, 1922, treating as a "dividend" any payment by a company, (not being a company in which the public was substantially interested), of any sum by way of advance or loan6 was upheld.

1. Navnit Lal v. A.A.S., AIR 1965 SC 1375 (1376): (1965) 1 SCR 909.

2. Balaji v. I.T.O., AIR 1962 SC 123 (125, 126): (1962) 2 SCR 983.

3. Baldev Singh v. C.I.T, AIR 1961 SC 736 (743): (1961) 1 SCR 482.

4. C.K. Devarajulu v. I.T.C., AIR 1963 Mad 183 (185), paras. 8-9

5. Baldeo Singh v. I.T.C., AIR 1961 SC 736.

6. Section 23A has been replaced with some changes by sections 104-109, Income-tax Act, 1961.

7. (a) Navnit Lal v. Appellate Assistant Commissioner, AIR 1965 SC 1375;

(b) Punjab Distilling Industries Ltd. v. C.I.T. Punjab, AIR 1965 SC 1865.

The Proposal for inclusion of Agricultural Income in the Total Income for the purpose of determining the Rat of Tax under the Income-Tax Act, 1961 Back

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