LexTHE COMMISSIONER OF INCOME TAX, BOMBAY versus THE ELPHINSTONE SPINNING AND WEAVING MILLS LTD.
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---'\ 3 S.C.R. SUPREME COURT REPORTS 953 fail. If the gift is invalid, the petition must fail on the ground that the Act has not affected the petition- ers' rights in any lands held by them. We would, therefore, dismiss that petition with costs except the costs of the hearing before us for all the three peti- tions were heard together. Lastly, we come to Petition No. 41 of 1956. This petition must clearly be dismissed. It was filed by the son of the petitioner in Petition No. 443 of 1955 claiming to be entitled to the sthanam lands situate in an area which was formerly Pi1'rt of the Cochin State. It is not in dispute that the impugned Act was never extended to that area. Therefore, whether the gift to him was valid or not, as to which we say nothing, the petitioner in this petition is not affected by that Act at all. His petition is clearly misconceiv- ed. His petition is, therefore, dismissed and he will pay the costs excepting the costs of the hearing. ORDER OF COURT. In view of the judgment of the majority, Petition No. 443 of 1955, is allowed with costs, Petition No. 40 of 1956, is allowed without costs, and Petition No. 41 of 1956, is dismissed without costs. THE COMMISSIONER OF INCOME TAX, BOMBAY v. THE ELPHINSTONE SPINNING AND WEAVING MILLS LTD. (S. K. DAS, J. L. KAPUR and M. HIDAYATULLAH, JJ.) Income-tax-Assessee incurring loss but paying dividends- Additional income-tax, liability to pay-Construction of taxing statute-Income-tax Act, I922 (XI of I922), s. 3-Finance Act, I9SI (23 of I9SI), First Schedule, Paragraph B. The assessee had made profits during the assessment year 1951-52 but after deduction of the depreciation allowance it was found to have incurred a loss for income-tax purposes. In the same year the assessee declared dividends. The Income-tax Officer treated this amount as ' excess dividend ' and levied additional income-tax as provided in paragraph B of Part I of the First Schedule to the Indian Finance Act, 195L The assessee contended that inasmuch as there was no income at all which wa~ 19~0 K avalappata Kottarathil Kochuni v. State of Madras Sarkar }. May 4, 954 SUPREME COURT REPORTS [l9fjUj Iy6o taxable the words "on the total income" in pa.ragraph B did not apply to it and no additional income-tax could be levied. co1nniissironer of ~fhe appellant, relying on the proviso to paragraph B, contended Jncorne Ta~. that additional income-tax was imposed on excess dividend and· Bombay if excess dividend was paid out, the liability to tax arose: v. Held, that the assessee was notliable to pay additional income- Etphinstone tax. The liability to tax was imposed by s. 3 of,the Income-tax 'P'""'i!J¥/'"i d Act and the Finance Act merely laid down the rates at which tax Weaving tl s 1 ·was to be levied on the total income. If there was no income there was no question of applying a rate to the "total income" and no income-tax or super-tax could possibly result. The word "additional" in the expression "additional income-tax" implied that there was a tax before. The expressions "charge on the total income " and "profits liable to tax " in paragraph B con- templated only those cases where there was income and not cases where there was loss. Consequently the expression "divi- dends payable out of such profits" could only apply when there were profits and not.when there were no profits. The imposition of additional income-tax was conditioned by the existence.of income and profits. The legislature used language appropriate to income and applied the rate to the "total income". Where there was no total income the law could not apply and the courts could not be asked to supply the omission made by the legislature or to delete or to modify any words. If the words of a taxing statute failed then so did the tax. The courts could not, except rarely and in clear cases, help the draftsman by a favourable construc- tion. Curtis v. Stovin, (r889) 22 Q.B. 5r3, Commissioner of Income- tax v. Teja Singh, [r959] 35 I.T.R. 408 S.C., Whitney v. Commis- sioners of Inland Revenue, (r925) IO T.C. 88, special Commissioners of Income Tax v. Linsleys, Ltd., (r958) 37 T.C. 677 and Com- missioners of Inland Revenue v. South Georgia Co. Ltd. (r958) 37 T.C. 725, distinguished. The Cape Brandy Syndicate v. The Commissioners of Inland Revenue, (r920) r2 T.C. 358 and Wolfson v. Commissioners of Inland Revenue, (r949) 3r T.C. r4r, referred to. The pr
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