Report No. 12
2. Definitions -
In this Act, unless there is anything repugnant in the subject or context,-
(1) "agricultural income" means-
(a) any rent or revenue derived from land which is used for agricultural purposes, and is either assessed to land revenue in India or subject to a local rate assessed and collected by officers of the Government as such;
(b) any income derived from such land by-
(i) agriculture, or
(ii) the performance by a cultivator or receiver of rent-in-kind of any process ordinarily employed by a cultivator or receiver of rent-in-kind to render the produce raised or received by him fit to be taken to market; or
(iii) the sale by a cultivator or receiver of rent-in-kind of the produce raised or received by him in respect of which no process has been performed other than a process of the nature described in paragraph (ii) of this sub-clause;
(c) any income derived from any building owned and occupied by the receiver of the rent or revenue of any such land, or occupied by the cultivator, or the receiver of rent-in-kind, of any land with respect to which, or the produce of which, any operation mentioned in paragraphs (ii) and (iii) of sub-clause (b) is carried on:
["Agricultural income"] [Section 2(1)]
Provided that the building is on or in the immediate vicinity of the land, and is a building which the receiver of the rent or revenue or the cultivator or the receiver of the rent-in-kind, by reason of his connection with the land, requires as a dwelling house, or as a store-house, or other out-building;
[Section 2(1)(c), proviso]
(2) "annual value", in relation to any property, means its annual value as determined under section 23 [Section re: determination of annual value for income from house property];
["Annual value"] [New]
(3) "Appellate Assistant Commissioner" means a person appointed to be an Appellate Assistant Commissioner of Income-tax under section /128(1) [Section 5(3)];
["Appellate Assistant Commissioner" (Section 2(3)]
(4) "approved superannuation fund" and "recognised provident fund" have the meanings assigned to them in section 318 [58N] and section 305 [58A], respectively;
["Approved superannuation fund" and "Recognised provident fund"] [New]
(5) "assessee" means a person by whom income-tax or super-tax or any other sum of money is payable under this Act, and includes-
(a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person or of the amount of refund due to him or to such other person;
(b) every person who is deemed to be an assessee under any provision of this Act;
(c) every person who is deemed to be an assessee in default under any provision of this Act;
["Assessee" [Section 2(2)]
(6) "assessment" includes re-assessment;
["Assessment"] [New]
(7) "assessment year" means the period of twelve months commencing on the 1st day of April every year;
["Assessment year"] [New]
(8) "average rate of income-tax" means the rate arrived at by dividing the amount of income-tax calculated on the total income, at the rate or rates applicable to the total income, by the total income:
"average rate of super-tax" means the rate arrived at by dividing the amount of super-tax calculated on the total income on which super-tax; is chargeable, at the rate or rates applicable to such total income, by such total income;
["Average rate of income-tax and average rate of super-tax"] [New]
(9) "business" includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture;
["Business"] [Section 2(4)]
(10) "capital asset" means property of any kind held by an assessee, whether or not connected with his business, profession or vocation, but does not include-
(i) any stock-in-trade, consumable stores or raw materials held for the purposes of his business, profession or vocation;
(ii) personal effects, that is to say, moveable property (including wearing apparel, jewellery and furniture) held for personal use by the assessee or any member of his family dependent on him;
(iii) agricultural land in India;
["Capital asset"] [Section 2(4A)]
(11) "the Central Board of Revenue" means the Central Board of Revenue constituted under the Central Board of Revenue Act, 1924 (4 of 1924);
[Central Board of Revenue"] [Section (4B)]
(12) "Commissioner" means a person appointed to be a Commissioner of Income-tax under section 128(1), [5(2)1;
["Commissioner"] [Section 2(5)]
(13) "company" means-
(i) any Indian company, or
(ii) any association, whether incorporated or not and whether Indian or non-Indian, which is or was assessable or was assessed as a company for the assessment year 1947-1948 under the Indian Income-tax Act, 1922 (11 of 1922) or by which is declared by general or special order of the Central Board of Revenue to be a company for the purposes of this Act;
["Company"] [Section 2(5A)]
(14) "co-operative society" means a co-operative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies;
["Co-operative society"] [Section 2(5B)]
(15) "director", "manager" and "managing agent" in relation to a company, have the meanings respectively assigned to them in the Companies Act, 1956;
["Director", "Manager" and "Managing agent"] [Section 2(8A)]
(16) "Director of Inspection" means a person appointed to be a Director of Inspection under section 128(1), 15(1)1, and includes a person appointed to be an Additional Director of Inspection, a Deputy Director of Inspection or an Assistant Director of Inspection:
["Director of Inspection"] [Section 2(6)]
(17) "dividend" includes-
(a) any distribution by a company of accumulated profits whether capitalised or not, if such distribution entails the release by the company to its share-holders of all or any part of the assets of the company;
(b) any distribution by a company of debentures, debenture-stock or deposit certificates in any form, whether with or without interest, to the extent to which the company possesses accumulated profits, whether capitalised or not;
(c) any distribution made to the share-holders of a company on its liquidation, to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation, whether capitalised or not;
(d) any distribution by a company on the reduction of its capital to the extent to which the company possesses accumulated profits which arose after the end of the previous year, ending next before the 1st day of April, 1933, whether such accumulated profits have been capitalised or not;
(e) any payment by a company, not being a company in which the public are substantially interested within the meaning of section 117 [23A Expl. 11, of any sum (whether as representing a part of the assets of the company or otherwise) by way of advance or loan to a shareholder or any payment by any such company on behalf or for the individual benefit of a shareholder, to the extent to which the company in either, case possesses accumulated profits; but "dividend" does not include-
(i) a distribution made in accordance with sub-clause (c) or sub-clause (d) in respect of any share issued for full cash consideration where the holder of the share is not entitled in the event of liquidation to participate in the surplus assets;
(ii) any advance or loan made to a shareholder by a company in the ordinary course of its business where the lending of money is a substantial part of the business of the company;
(iii) any dividend paid by a company which is set off by the company against the .whole or any part of any sum previously paid by it and treated as a dividend within the meaning of sub-clause (e), to the extent to which it is so set off.
Explanation 1.-The expression "accumulated profits", wherever it occurs in this clause, shall not include capital gains arising before the 1st day of April 1946, or after the 31st day of March, 1948, and before the 1st day of April, 1956.
Explanation 2.-The expression "accumulated profits", in sub-clauses (a), (b), (d) and (e), shall include all profits of the company up to the date of distribution or payment referred to in those sub-clauses.
["Dividend"] [Section 2(6A)]
(18) "earned income" means any income of an assessee who is an individual, Hindu undivided family, unregistered firm or other association of persons not being a company, a local authority, a registered firm or a firm assessed under section 190(b) [clause (b) of sub-section (5) of section 23]-
(a) which is chargeable under the head "Salaries"; or
(b) which is chargeable under the head "Profits and gains of business, profession or vocation" where the business, profession or vocation is carried on by the assessee; or
(c) which represents the share in the profits and gains of a firm, where the assessee is a partner actively engaged in the conduct of the business, profession or vocation of the firm; or
(d) which is chargeable under the head 'Other sources' if it is immediately derived from personal exertion or represents a pension or superannuation or other allowance given to the assessee in respect of his past services or the past services of any deceased person;
but does not include any such income on which no income-tax is payable under section 87(iii)(iv) and (v) [sub-section (2) of section 14.].
Explanation.-Where any such income is, though it is the income of another person, included in the assessee's total income under the provisions of this Act, it shall be regarded as earned income in the hands of the assessee;
[" Earned income"] [Section 2(6AA)]
(19) "firm" "partner" and "partnership" have the same meanings respectively as in the Indian Partnership Act, 1932 (9 of 1932); provided that the expression 'partner' includes any person who being a minor has been admitted to the benefits of partnership;
["Firm" "partner" and "partnership"] [Section 2(68)]
(20) "income" includes-
(i) profits and gains;
(ii) dividend;
(iii) the value of any perquisite or profit in lieu of salary taxable under section 17, clauses (3) and (4) [7, Expls. 1 and 2];
(iv) the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by any other person who has a substantial interest in the company, and any sum paid by any such company in respect of any obligation which but for such payment would have been payable by the director or other person aforesaid;
(v) any sum chargeable to income-tax under section 41(2) [second and fourth provisos to clause (vii) of section 10(2)] or under section 41(3), [the second proviso to clause (xiv) of sub-section (2) of section 10] and any sum chargeable to income-tax under section 41(1) [sub-section (2A) of section 10] or under section 62(1) [sub-section (5) of section 12];
(vi) any sum chargeable to income-tax under section 28(ii) [sub-section (5A) of section 10] or under section 28(iii) [sub-section (6) of section 10];
(vii) any capital gains chargeable under section 45 [section 128(1), main para, part dealing with charge];
(viii) the profits and gains of any business of insurance carried on by a mutual insurance association or by a co-operative society, computed in accordance with section 44 [Rule 9 in the Schedule] or any surplus taken to be such profits and gains by virtue of that provision;
(ix) any contributions and interest thereon, paid to an employee by an approved superannuation fund, to the extent provided in section 312 (58S (1)1;
["Income"] [Section 2(6C)]
Explanation.-In this clause, the expression "person who has a substantial interest in the company" means a person who is concerned in the management of the business of the company, being the beneficial owner of shares, not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits, carrying not less than twenty per cent. of the voting power.
(21) "Income-tax Officer" means a person appointed to be an Income-tax Officer under section 128(1) or 128(2) [5(3)];
["Income-tax Officer"] [Section 2(7)]
(22) "Indian company" means a company formed and registered under the Companies Act, 1956 (1 of 1956), and includes-
(i) a company formed and registered under any previous companies law for the time being in force in any part of India other than the State of Jammu and Kashmir);
(ii) in the case of the State of Jammu and Kashmir, a company formed and registered under any other law for the time being in force in that State;
Provided the registered office of the company in all cases is in India.
["Indian company"] [Section 2(7A)]
(23) "Inspecting Assistant Commissioner" means a person appointed to be an Inspecting Assistant Commissioner of Income-tax under section 128(1) [5(3)];
["Inspecting Assistant Commissioner"] [Section (6D)]
(24) "Inspector of Income-tax" means a person appointed to be an Inspector of Income-tax under section 128(2) [5(3)];
["Inspector of Income-tax"] [Section 2(6E)]
(25) "Magistrate" means a Presidency Magistrate, or a Magistrate of the first class
["Magistrate"] [Section 2(8)]
(26) "non-resident" means a person who is not a "resident";
["Non-resident"] New]
(27) "person" includes-
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm or other association of persons, whether incorporated or not, or the partners of the firm or the members of the association individually,
(v) a body of individuals, whether incorporated or not.
(vi) a local authority, and
(vii) every artificial juridical person, not falling within sub-clauses (i) to (vi). ("Person")
[Section 2(9)]
(28) "prescribed" means prescribed by rules made under this Act:
["Prescribed"] [Section 2(10)]
(29) "previous year" means previous year as defined in section 5 [section defining previous year, placed in the draft after section 4];
["Previous year"] (New]
(30) "principal officer", used with reference to a local authority or a company or any other public body or any association, means-
(a) the secretary, treasurer, manager or agent of the authority, company, body or association, or
(b) any person connected with the authority, company, body, or association upon whom the Income-tax Officer has served a notice of his intention of treating him as the principal officer thereof;
["Principal officer"] [Section 2(12)]
(31) "public servant" has the same meaning as in the Indian Penal Code, 1860 (45 of 1860);
["Public servant" ] [Section 2(13)]
(32) "registered firm" means a firm registered under the provisions of section 192 (a) or under that provision read with section 191(7) [26A embodied in sections in the chapter on firms dealing with registration];
["Registered firm"] [Section 2(14)]
(33) "regular assessment" means the assessment made under section 147 or 148 [23(1) to (5)];
["Regular assessment"] [Section 18A(5), main para, part]
(34) "resident" means a person who is resident in India within the meaning of section 6 [4A];
["Resident" ] [New]
(35) "tax" means income-tax and super-tax chargeable under the provisions of this Act;
["Tax"],[New]
(36) "total income" means total amount of in come referred to in section 4 [4(1)] computed in the manner laid down in this Act;
["Total income"] [section 2(15), part]
(37) "total world income" includes all income, wherever accruing or arising, except incomes which are not included in the total income under any of the provisions of Chapter III [Incomes which do not form part of total income] and except any capital gain which is not includible in the total income of an assessee;
["Total world income"] [Section 2(15), part]
(38) "unregistered firm" means a firm which is not a registered firm.
["Unregistered firm"] [Section 2(16)]
