The Hindu Business Line : Thumbing thru a tax lexicon

THERE are two forms of interpretation clauses. In one, when the word defines is declared to `mean' something, the definition is explanatory and prima facie restrictive. In the other, where the word defined is declared to `include' something, the definition is extensive. A definition or interpretation clause which extends the meaning of a term does not take away its ordinary meaning. The word `salary' and `profits in lieu of salary' have, therefore, to be understood as comprehensive of not only such things as they signify according to their nature and import but also those things which the interpretation clause declares that they shall include (Patil Vijaykumar vs Union of India (1985 151 ITR 48 Karnataka.)

Presumption as to the knowledge of law (per curiam): There is no presumption that every person knows the law. It is often said that every one is presumed to know the law, but that is not a correct statement: there is no such maxim known to the law (Motilal Padampat Sugar Mills Co Ltd vs State of Uttar Pradesh (1979 118 ITR 326 SC).

Expressions defined in the direct tax laws and judicial interpretation of such expressions: Author (Explanation (i) to Section 80QQA ITA): In the context of deduction in respect of professional income of authors of text book in Indian languages the expression. Includes a joint author.

Books or books of account (Section 2(12A) ITA — FA 2001: wef June 1, 2001): Unless the context otherwise requires the expression includes ledgers, day-books, cash books, account-books, and other books, whether kept in the written form or as print-outs of data stored in a floppy, disc, tape or any other form of electro-magnetic data storage device.

Card game and other game of any sort (Explanation (ii) to 2(24)(ix) ITA): In the context of definition of "income" from lottery and game for purposes of ITA, the expression includes any game show, an entertainment programme on television or electronic mode, in which people compete to win prizes or any other similar game.

Cost of production (Explanation (ii) to Rule 9A(1) IT Rules): In the context of deduction in respect of expenditure on production of feature films, the expression means the expenditure incurred on the production of the film, not being the expenditure incurred for the preparation of the positive prints of the film; and b) the expenditure incurred in connection with the advertisement of the film after it is certified for release by the Board of Film Censors: Provided that the cost of production of a feature film, shall be reduced by the subsidy received by the film producer under any scheme framed by the Government, where such amount of subsidy has not been included in computing the total income of the assessee for any assessment year.

Information technology software (Explanation (c) to Section 115A CA ITA): In the context of tax on income from global depository receipts purchased in foreign currency or capital gains arising from their transfer, the expression means

any representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form and capable of being manipulated or providing inter-activity to a user, by means of an automatic data processing machine falling under heading information technology products but does not include non-information technology products.

Past due (Explanation to Rule 6EB IT Rules): In the context of deduction on account of bad or doubtful debts the expression for purposes of Rule 6EB, the expression shall be deemed to mean a debt when it remains unpaid for 30 days beyond the due date.

Remote area (Explanation (v) to Rule 3 IT Rules): In the context of determination of perquisite under the IT Rules, the expression for purposes of proviso to this sub-rule means an area that is located at least 40 km away from a town having a population not exceeding 20,000 based on latest published all-India census.

Rent (Explanation (i) to Section 194-I ITA): In the context of deduction of tax at source on income from rent, the expression any payment, by whatever name called, under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or any building (including factory building), together with furniture, fittings and the land appurtenant thereto, whether or not such building is owned by the payee.

Television news software (Explanation (h) to Section 80HHF ITA): In the context of deduction in respect of profits and gains from export or transfer of film software, the expression means a collection of sounds and images, reportage, data and voice of actualities broadcast either through terrestrial transmission, wire or satellite, live or pre-recorded on video cassettes or digital media.

Tour (Section 65(76) Finance Act 1994, SERT): Means a journey from one place to another irrespective of the distance between such places.

Y2k compliance computer system (Explanation (b) to Section 36(1) (xi) ITA): In the context of other deductions admissible in the computation of income from profits and gains of business or profession, the expression means a computer system capable of correctly processing, providing or receiving data relating to date within and between the twentieth and twenty-first century.

(Edited excerpts from Dictionary on tax laws. Courtesy: Company Law Institute of India Pvt Ltd. www.cliofindia.com)

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