Kerala High Court
Mahomad Ibrahim Hussain Sait And Anr. vs Kerala Wakf Board, Ernakulam on 10 March, 1964
Equivalent citations: AIR1964KER310, AIR 1964 KERALA 310, 1964 (2) ITJ 352, 1964 KER LJ 435, 1964 KER LT 367
JUDGMENT
1. The petitioners in O. P. No. 485 of 1962 are the appellants before us. They are the Joint managing trustees of the Abdul Sathar Haji Moosa Sail Dharmasthapanam. The respondent in the O.P. and before us is the Kerala Wakf Board, a Board established under Section 9 of the Wakf Act, 1954.
2. Section 46 of the Act deals with the annual contribution payable to the Board. Sub-section (1) of that section reads as follows:
'The mutawalli of every wakf shall pay annually to the Board such contribution not exceeding five per cent of the net annual income of such of its property as is situate. In the State as the Board may, subject to the sanction of the State Government, from time to time, determine:
Provided that no such contribution shall be payab'a by the mutawalli of a wakf of which the net annual in come does not exceed one hundred rupees."
It is common ground that the contribution payable to the Board by the Dharmasthapanam is five per cent, of its net annual income. The controversy is as regards the meaning of the expression "net annual income".
3. The Dharmasthapanam, we are told, has created no tenancies, and that it cultivates its properties directly, without the intervertion of any intermediary. The question for determination is whether the "net annual income" includes the expenses of such cultivation as contended by the Board and held in the judgment under appeal.
4. According to the appellants the expenses of cultivation should be deducted, and it could not have been the intention of the Legislature to make a trust pay a higher amount by way of contribution simply because it had not teased its properties. There is no doubt that if the properties had been leased, the five per cent, would have been payable only on the rent received by the Dharmasthapanam from its tenants, and that such rent would have been fixed only after deducting the expanses of cultivation that the tenants would have to incur and a fair margin of profit for those tenants.
5. A definition of the expression "net income" is available in Section 3 (g) of the Act. According to that definition, unless the context otherwise requires, "net income" means "the total income less any revenue, cess, rates and taxes payable to the Government or any local authority". The expression "total income" is not defined in the Act, and occurs only in the definition above-mentioned.
6. The expression "gross income" is used in Section 4 (3) (c) and the expression "gross annual income" in Section 25 (3) (b) of the Act. Those expressions also are not defined in the Act. The word "gross" as an adjective means "without any deductions" and it is not difficult to say that it is opposed to the word "net"
which normally means "clear or all charges and deductions".
7. Section 3 (g), however, does not refer to "gross Income". It refers to "total Income". We are not satisfied that the expressions are synonymous In the Act with which we are concerned.
8. Income is a word that takes its colour from its context. According to the dictionary it means "a thing that comes in". "But such a broad literal meaning of the term", as pointed out by La Brie, "does not satisfy even the normal requirements for day-to-day expression".
9. The expression "net income" occurs only in Section 3 (g) of the Act. The expression "net annual income" occurs in Sections 46 (1) and 46 (3), and the expression "surplus income" in Section 15 (2) (e). In the light of those provisions and the other provisions of the Act in which the word "income" occurs we think we shall be justified in saying that "total income" In Section 3 (g) of the Act is an income exclusive of the expenses of cultivation and that "net income" under that definition is the said total income minus the revenue cess, rates and taxes payable to the Government or any local authority".
10."Income", said Lord Wright in Kamakshya Narain Singh v. Commr. of Income-tax, B. and O., AIR 1943 PC 153, "is a word of the broadest connotation". "What, then, is the ordinary, natural and grammatical meaning of the word 'income'?" asked the Supreme Court in Navinchandra Mafatlal v. Commr. of Income-tax, Bombay City, (S) AIR 1955 SC 58. The answer was:
"Its natural meaning embraces any profit or gain which is actually received."
The same is the natural meaning as given in Travancore Rubber and Tea Co. Ltd. v. State of Kerala, 1963-48 ITR (SC) 102 : (AIR 1964 SC 572).
11. Profit or gain means an economic advantage. The Shorter Oxford Dictionary treats those words as identical, and in defining the word "profit" says:
"The pecuniary gain in any transaction; the excess of returns over the outlay of capital; in political economy, the surplus product of industry after decucting wages, cost of raw material, rent, and charges".
12. In the light of what is stated above we must uphold the contention of the appellants and allow this appeal. We do so; but in the circumstances of the case without any order as to costs.