ABDUL RAHIMAN Vs. CIT

JUDGEMENT

(1.) An interesting question concerning the construction of S.220(7) of the Income Tax Act, 1961 arises for decision. Sub-s.(7) of S.220 of the Act reads:

(2.) The term "expenditure" is not defined in the Income Tax Act, 1961. In common parlance expenditure means, amounts spent by a person or expended by a person, payments of taxes are normally items of expenditure and therefore without anything more the explanation would indicate that even expenditure by way of payment of taxes outside India out of the income which cannot be repatriated to India should be deemed to have been brought to India. But learned counsel Sri. Peter appearing for the petitioner in this case wants this court to construe the term expenditure in a more limited sense. According to counsel, since the amount paid by way of income tax in Ceylon is amount which he was obliged to pay by the very fact of income having accrued to him there it cannot be deemed to be an item of expenditure, for, if it be otherwise the consequence would be that on money which has not reached his bands in India and by which he was not benefited to any extent in India he is asked to pay tax in India. According to counsel it may even happen that where the assessee's income arising to him outside India is considerable compared to his income in India and the tax upon it is consequently high, the tax he may have to pay by reason of treating such expenditure as deemed income in India may happen to be more than the income which he actually receives in India. I do not rule out the possibility of such a hypothetical case. But I am not to strain the language of the section in order to reach an equitable result if the meaning of the section is plain enough. I do not think even the difficulty pointed out by learned counsel does exist, for, S.90 of the Act conceives of reliefs in such cases. S.90 of the Income Tax Act 1961 reads: