In support of its claim the Society relied upon the instructions published in the Income tax Manual, 1946.
The Judgement of the Court was delivered by Shah, J. This is an appeal with special leave.
In the view of the Income tax Officer the Society companyld number claim the benefit of the Departmental Instructions, since in the relevant year of assessment those instructions had ceased to operate, and the Societys claim was governed by the Explanation to s. 8 of the Income tax Act as incorporated by the Finance Act of 1956, with effect from April 1, 1956.
The appellant is a Society registered under the Co operative Societies Act, 1912.
Appeal by special leave from the judgment and order dated July 11, 1962 of the Madras High Court in Tax Case No.
4,30,053/ , Rs.
84 of 1960.
The following table sets out the data relating to the earnings, investments, working capital, outgoings and expenditure of the Society for the year ending June 30, 1955, relevant to the assessment year 1956 57 Interest from Government securi ties.
capital Rs.473,42,603 00 Interest paid on debentures, depo sits and other accounts Rs.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
Rs.4,310,453.00 Total gross earnings Rs.21,00,99 4.00 Investments in Government securities Rs.130,60,653 00 Total working.
13,578/was chargeable to tax.
3,01,102 00 In a proceeding for assessment of the total income of the Society to tax for the year 1956 57 it was claimed that under S. 14 3 of the Indian Income tax Act, 1922 as added by S. 10 of the Finance Act, 1955, with effect from April 1, 1955 the income of the Society from business was exempt from payment of tax, and that in accordance with the instructions issued under S. 60 of the Act, out of the gross income from securities amounting to Rs.
15,09,490 00 Total overhead expenses and es tablishment overhead charges Rs.
Swaminathan and R. Gopalakrishnan, for the appellant.
Veda Vyasa, A. N. Kirpal, R. N. Sachtliey and S. P. Nayar, for the respondent.
4,16,475/ being income attributable to the assets utilized in the business, only the balance of Rs.
1975 of 1966.
