1984 PLP (Trib (PTD)

income from the business of manufacture able under paragraph A or , purchase or sale of paragraph B, a further sum Jeweler, including gold, silver equal to 6% of such income. precious metals, stones and ornament or other articles made thereof: Provided that the surcharge shall not be payable by any person (not being a company) whose total income does not exceed Rs. 12,000." This provision was amended by Finance Ordinance, 1980, by raising the rate from 6% to 10% Finance Ordinance, 1981, further changed the position as:- In addition to any sum payable under para. B, a further sum computed as under:- (a) Where such income does not exceed Rs. 15,000. 6 % of such income. (b) Where such income exceeds Rs. 15,000 but does not exceed to Rs. 25,

000. Rs. 900 + 8 % of the amount exceeding Rs. 15,000. (c) Where such income exceeds Rs. 25,000 Rs. 1,700 + 10% of the amount exceeding Rs. 25,

000. Provided that surcharge under this paragraph shall not be payable by any person, (not being a company) whose total income does Lot exceed Rs. 12,

000. Vide Finance Ordinance, 1983, para. C. was substituted as under :- "In the case of every person deriving income from the business of manufacture, purchase or sale of Jewellery including gold, silver, precious metals, stones and ornaments or other articles made thereof, the surcharge shall be payable as under :- (a) Where such income does not exceed Rs. 21,000. 6% of such income. (b) Where such income exceeds Rs. 21,000 but does not exceed Rs. 31,

000. Rs. 1,260 + 8 % of the amount exceeding Rs. 21,000. (c) Where such income exceeds Rs. 31,

000. Rs. 2,060 + 10% of the amount exceeding Rs. 31,

000. Provided that the surcharge shall not be payable by any person (not being a company) whose total income does not exceed Rs. 18,000.

3. The D., R. contended that under law surcharge is leviable on total income of an assessee as words used in Clause 'C' of Part III of Fin Schedule are 'income' or 'such income'. No where in this clause words 'taxable income' 'having been used, the D. R's case was that surcharge was a levy on total income. The D. R. emphasized that the words 'taxable income' were not specifically used in Clause 'C' as compared to other clauses of the First Schedule and it eras not a drafting error but was intentional construction of law. The assessee's A. R. in his tuna contended that surcharge being tax like other tax i.e. income-tax and super-tax as is apparent from the definition of word 'tax', income basically exempt is to be deducted from the total income. The assessee's A. R. adopted the same argument as given in subsequent decision of the learned Single Bench. It was argued that to view of definition of 'taxable income' as per Part IV, para. B, sub-clause of the First Schedule of the Ordinance, surcharge is to be levied only able income as basic exemption of exempted income is allowable to every assessee notwithstanding anything contained in this Ordinance.

4. A bare perusal of the relevant provisions of section 40 (b) read with para. C of Part III of the First Schedule, leaves us in no doubt that jewelers surcharge is not to be levied if the income falls below the slab of exempted income, where, however, the income exceeds the allowed exemption, Jeweller's surcharge is it leviable on the whole of such income according to rates prevalent for the relevant year. Change in law is manifest and amount of exemption was restricted firstly to Rs.12,000 then to Rs.18,000 and where the assessed income exceeds exempted slab, whole amount whether of an individual or A. O. P. becomes liable to jeweller's surcharge, In this view of the matter, we overrule the decision of the learned Single Bench in I. T. A. Nos. 2730, 2731 and 2732 of 1981-82, dated 5-8-1983 holding that the words "such income" used in Part III of Schedule are relateable to word income as used in main para of clause 'C' which in other words means that whatever income is derived by the assessee has to be subjected to the levy of surcharge as word 'taxable income' has not been used in this para unlike other paragraphs. No doubt the proviso lays down that surcharge under para. C of Part III of First Schedule shall not be payable by any per (not being company) whose total income does not exceed Rs. 12,000 (or as the limit of exempted may be) but in cases where the total income does exceed the prescribed limit there being no provision that the surcharge has to be on taxable income alone, it is leviable on whatever income is derived by the assessee from the business of manufacture and sale of Jewellery. Section 10 subsection (2) of section 10 of the Ordinance surcharge is leviable on the total income of the-assessee as assessed for the purposes of income-tax. "Other provision" as mentioned in this section means provision of levy under part III of the First Schedule for the purpose of levy of surcharge on the Jeweller's. In the result, for the aforesaid reason we hold that Jeweller's surcharge n leviable on the entire assessed income. Impugned orders are vacated an treatment meted out by the I. T. O. is restored. Both the departmental appeal succeed accordingly. M. Z. M. Appeal accepted.