Appeal No 1174 of 1967
Appeal from the judgment and order dated August 22 1966 of the Assam  Nagaland High Court in income tax Reference No 3 of 1966
Jagadish Swarup Solicitor General G C Sharma R N Sachthey and B D Sharma for the appellant
T A Ramachandran for the respondent
The Judgment of the Court was delivered by Hegde J
The Commissioner of Income tax Assam and Nagaland has brought these appeal by certificate
The assessment with which we are concerned in this appeal is for the assessment year 1963 64 the relevant accounting year is the financial year 1962 63
The assessee was the manager of a Tea Estate under the managing agency of Ms Gillanders Arbuthnot  Co Ltd The said Co had a Provident Fund scheme for its employees
But that provident fund was not a recognised one
The assessee retired during the previous year relevant to assessment year 1963 64 and received out of this provident fund an 439 amount of Rs 27948 which represented the interest on the amount of his own contribution to the fund
The Income tax Officer assessed this amount as the assessee s income from other sources
That order was confirmed in appeal by the Appellate Assistant Commissioner
But on further appeal to the tribunal by the assessee the tribunal came to the conclusion that the receipt in question being profits in lieu of salary  the same was his salary as defined in section 17 of the Income tax Act 1961 to be hereinafter referred to as the Act the same having not been assessed as his salary the assessment order relating to that item of receipt was not legal
At the instance of the Commissioner the tribunal referred the following question of law to the High Court of Assam and Nagaland for its opinion Whether on the facts and circumstances of the case and having regard to the provisions of section 17 3 ii of the Income tax Act 1961 the amount Rs 27948 representing the interest on the amount of the assessee s own contributions to an unrecognised provident fund was assessable under the residuary section 56 of the said Act The High Court answered that question in the negative and in favour of the assessee
While it came to the conclusion that the receipt in question cannot be considered as salary as defined in section 17 in its view the same was exempt from payment of tax in view of section 173 ii
The Commissioner is challenging the above conclusion
The receipt of Rs 27948 is undoubtedly an income as defined by section 224
The receipt of an interest on any investment is a gain made by the investor and therefore the same is income
The next question is whether the said income is exempt from tax or if it is not exempt under what head the same has to be brought to tax Section 14 of the Act gives the heads of income
They are A Salaries B Interest on securities C Income from house property D Profits and gains of business or profession E Capital gains and F Income from other sources
The salaries are brought to tax under section 15 and the income from other sources is brought to tax under section 56
In this appeal we are not concerned with the other heads of income The salary is defined in section 17 as including any profits in lieu of or in addition to any salary or wages section 171iv
Subsection 3 of section 17 says  profits in lieu of salary includes 440 ii any payment  due to or received by an assessee from an employer or a former employer or from a provident or other fund not being an approved superannuation fund to the extent to which it does not consist of contribution by the assessee or interest on such contributions
 The contributions to recognised provident funds are dealt with by other provisions of the Act
Herein we are concerned with the contribution to an unrecognised provident fund
The learned judges of the High Court opined that the receipt by the assessee with which we are concerned is exempt from the payment of tax in view of section 17 3 ii
In our opinion they were clearly in error in arriving at that conclusion
Deductions from salaries are dealt with by section 16
In view of section 17  I  iv all receipts of profits in lieu of salary have to be considered as salary
But then the question is what is meant by profits in lieu of salary
In defining the expression Profits in lieu of salary the legislature excluded from the scope of that expression any payments received by the assessee from a provident fund his own contributions to the fund or any interest on such contributions
From that it follows that the receipt of Rs 27948 by the assessee in the relevant accounting year cannot be considered as salary though undoubtedly that is an income
Section 17 has nothing to do either with deductions or with exemptions
It is merely a provision defining the expression salary
As the income in question is not salary and the same cannot be said to be either interest on the securities income from house pro perty profits and gains of business or profession or capital gains
it has to be considered as income from other sources and brought to tax under section 56
Section 56 I provides that income of every kind which is not to be excluded from the total income under the Act shall be chargeable to income tax under the head income from other sources if it is not chargeable to income tax under any of the heads specified in section 14 items A  to E 
In our opinion the meaning of section 173 ii is plain and unambiguous
Hence there is no need to call into aid any of the rules of construction as was sought to be done by the High Court
The respondent was not represented before this Court
We are obliged to Mr T A Ramachandran for acceding to our request to appear on his behalf an amicus curiae and assist us at the time of hearing of the appeal
441 For the reasons mentioned above we allow this appeal dis charge the answer given by the High Court and answer the question referred to the High Court in the affirmative and in favour of the Department
Under the circumstances of the case we make no order as to costs


Summary:
On the question whether an amount representing the interest on the amount of the assessee s own contributions to an unrecognised provident fund was assessable under the residuary section 56 of the Income tax Act 1961 HELD  The amount was liable to be assessed
The receipt of an interest of any investment is a gain made by the investor and therefore the same is income 
In view of section 17  1 iv all receipts of profits in lieu of salary have to be considered as salary
In defining the expression profits in lieu of salary  the legislature excluded from the scope of that expression any payments received by the assessee from a provident fund his own con tribution to the fund or any interest on such contributions
Therefore this receipt cannot be considered as salary though undoubtedly that is an income
As the income in question is not salary and the same cannot be said to be either interest on the securities income from house property profits and gains of business of profession or capital gains it has to be considered as income from other sources  and brought to tax under section 56
Section 561 provides that income of every kind which is not to be ex cluded from the total income under the Act shall be chargeable to Incometax under any of the heads specified in section 14 item A to E
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