Judgment :- SATYANRAYANA RAO, J. The question is " Whether on the facts and in the circumstances of the case, interest on securities received by the applicants should be treated as earned income, falling under the head 'income from business' (Section 10), or 'income from other sources' (Section 12), and should not be treated as income from 'securities' (Section 8) ? The assessees during the accounting year ending with 31st December, 1945, had several sources of income, viz., interest on securities, profits of business, didvidends and other interests. The business, however, ended in loss. They claimed earned income relief in respect of the interest on securities on the ground that the securities, the Government Promissory Notes, which they purchased and sold as part of their business formed stock-in-trade and that the profits arising in such purchase and sale including the interest on securities should be treated as business profits. As the other business ended in loss, naturally they could not claim earned income relief in respect of that business. The claim was, therefore, confined to the interest on securities. The definition of " earned income " in section 2(6AA) does not include interest on securities falling under section 8 of the Act, as it does not involve a personal exertion in earning income on the part of the assessee. The attempt, therefore, of the assessees was to bring this activity, viz., purchase and sale of securities, as part of their business under section 10 of the Income-tax Act. They were, howlever, not successful before the revenue authorities who held that the interest on securities is assessable under section 8 and could not be treated as part of the business income This view of the department has been challenged before us solely on the ground that income treated as interest on securities should also be included in the business income, because it formed part of their business operations. The answer given on behalf of the revenue authorities by Mr. The answer given on behalf of the revenue authorities by Mr. Rama Rao Sahib, learned counsel, was that, as the income which represents interest on securities falls under a head which is specifically provided for by section 8, is not open to the assessees to contend that it should be treated as part of their business income., as it is made separately chargeable under section 8It is necessary in this connection to understand the underlying scheme of the provisions of the Act relating to the charging of income to tax and the mode of computation of income. It is an undoubted fact that income-tax is one single tax on the aggregate total income of an assessee. It is, however, classified under various heads and made chargeable under such heads. Section 3 of the Act is the charging section. Section 4 defines the limits to which the net may be spread by the department. Section 6 classifies the heads, and sections 8 to 12 enumerate the principles on which the computation of the income under various heads should be made. The classification under section 6 under various heads however does not mean that there are as many taxes as there are heads of income. The tax, as stated above, is one tax on the aggregate of the income. If once the income is dealt with under the proper head, it cannot be dealt with again under another head as when once the income is taxed, its source for purposes of taxation becomes exhausted. These principles have been well established both in England and in India. It is not open either to the department or to the assessee to claim that an income which clearly falls under one head should be dealt with under a different head for the purpose of either claiming more tax by the tax gatherers or claiming that the burden should be made light by the taxpayer. The leading case on this subject is that of the House of Lords in Salisbury House Estate Ltd. No doubt, in that case the attempt to tax under a different head the same income was made by the Special Commissioners and not by the assessee but that does not in our opinion make any difference. The leading case on this subject is that of the House of Lords in Salisbury House Estate Ltd. No doubt, in that case the attempt to tax under a different head the same income was made by the Special Commissioners and not by the assessee but that does not in our opinion make any difference. The point in dispute shortly stated was that a certain house property was assessed to tax on its annual value under Schedule A. The house was however let to various tenants and the assessee received rents from them after providing certain amenities to the tenants. There was no doubt a large difference between the annual value of the house as estimated in accordance with the principles laid down for the determination of the annual value and the rent actually received. The Special Commissioners claimed that notwithstanding that the house was assessed to tax under Schedule A, it was open to them to take into consideration, in arriving at the profits of the business, the rents received from the tenants and after giving credit, with a view to avoid double taxation, to the amount which was taken into consideration as annual value, and that the balance of the profits left should be assessed under Schedule D. It was held by the House of Lords that notwithstanding that more rent was received over and above the annual value of the building, it was not open to the Special Commissioners to take those rents into consideration with a view to arriving at the profits under Schedule D. It may be mentioned that the scheme of taxation under the English Act was : Schedule A provided for the taxation of income derived from property and land ; Schedule B for income derived from the occupation of land ; Schedule C for income derived from Government Securities ; Schedule E for income derived from employment in public service and Schedule D provided for taxation of income not dealt with specifically in any of the schedules. Lord Atkin in the course of his speech at page 457 dealing with the scheme of these schedules observed :--Believing, as I do, that the specific Schedules A, B, C and E, and the rules thereunder, contain definite Codes applying exclusively to their respective defined subject-matter I find no ground for assessing the taxpayer under Schedule D for any property or gains which are the subject-matter of the other specific schedules. In the present case the income from the offices should be and has been assessed under Schedule A on the annual value as prescribed by statute. It therefore is not the subject-matter of assessment under D. I should add that if there had been an option to assess under A or D I cannot conceive a more conclusive election under the option than the assessment and receipt of payment under Schedule A, but this point need not be determined." This principle was applied by the Court of Appeal in Thompson v. Trust and Loan Company of Canada on appeal from the decision of Rowlatt, J., in Thomson v. Trust and Loan company of Canada. In that case a company carried on business as a loan and finance company. In the course of its business it had dealings in stocks, shares and other securities. The process adopted by them in the purchase of treasury bonds was somewhat similar to the process adopted by the assessees in this case. They bought treasury bonds cum coupons but sold the bonds ex coupons. The coupons were cashed by them after detaching them from the bonds and they received interest on the bonds less tax deductible at the source. The Special Commissioners claimed that as the bonds were really part of the trade assets of the company, the income of the company should be assessed under Schedule D in respect of the profits or gains of the company's business and that the net interest received by the company which was taxed under Schedule C could be brought into account for the purpose of assessment by giving credit to it to avoid double tax. The interest on the bonds, of course, as under the Indian Act, was separately chargeable to tax under Schedule C. The contention of the Special Commissioners was disallowed by the Court of Appeal applying the principle of the decision in Fry v. Salisbury House Estate Limiled. The interest on the bonds, of course, as under the Indian Act, was separately chargeable to tax under Schedule C. The contention of the Special Commissioners was disallowed by the Court of Appeal applying the principle of the decision in Fry v. Salisbury House Estate Limiled. At page 528 Lord Hanworth, M. R., considered the question and observed" If then the company's purchase was of bonds which in the ordinary course would bear fruit, they are entitled for the purposes of Schedule D to set against the price paid for the bonds the price received for them. It may seem at first sight as if something more ought to be brought into account, as if for the purposes of an assessment under Schedule D that was too simple a way of looking at the transaction and that something more ought to be brought into account ; but income tax is charged upon the subject by the Income Tax Acts. It may well be that the system is not perfect, that it is not entirely a coherent whole, yet the Court has to see whether or not any other subject-matter is brought into charge under the Code provided by the Income Tax Acts. The reason why the Salisbury House case has been referred to is not because of an analogy in the facts, but because of the important demonstration in that case of the general principle underlying the Income Tax Act, 1918. Lord Dunedin there makes it plain that income tax as it is imposed under this Act is one tax to be recovered in a particular manner in respect of each particular property and in accordance with the particular circumstances ; and Lord Atkin, dealing with the matter in a manner which is a little closer to this case, says : ' In my opinion it makes no difference that the income so derived forms part of the annual profits of a trading concern. For the purpose of assessing such profits for the purpose of Schedule D the income so derived is not to be brought into account', and later, 'Similarly I am of opinion that income derived by a trading company from investments of its funds, whether temporary or permanent, in Government Securities must be taxed under Schedule C, and cannot for the purposes of assessment under Schedule D be brought into account.' Then again he says : 'I find no ground for assessing the taxpayer under Schedule D for any property or gains which are the subject-matter of the other specific schedules.'At the bottom of page 529, it is observed " In the present case it is plain that this subject-matter of tax, coupons on Government bonds payable out of the Government funds, has got to be taxed under Schedule C. It cannot be taxed under any other schedule. When the total sum received out of public revenue has been subjected as a totality to the incidence of tax under Schedule C, it is removed from being taxed under Schedule D, for Schedule D in terms provides that it is only to apply under Case (which applies here) 'in respect of any trade not contained in any other schedule' " * If an income falls under more than one head, the assessee has the option of choosing for the purpose of income-tax such head which makes the burden on his shoulders lighter. This was the principle enunciated by Krishnaswami Ayyangar, J., in Commissioner of Income-tax v. Bosotto Brothers where the learned judge stated :-- "Being a taxing statute, the Income-tax Act should receive a strict construction, that is, a construction in favour of the subject, and not in favour of the Crown. If a case appears to be governed by either of two provisions, it is clearly the right of the assessee to claim that he should be taxed under that one which leaves him with a lighter burden" * The principle herein enunciated applies to a case where clearly an income can be brought under either of two heads. But if there is no doubt as regards the head under which a given income becomes chargeable to tax, it is not open either to the assessee or to the department to ignore that head and deal with the income for the purpose of the tax under a different head. But if there is no doubt as regards the head under which a given income becomes chargeable to tax, it is not open either to the assessee or to the department to ignore that head and deal with the income for the purpose of the tax under a different head. In other words, it is imperative on the part of the department to charge the incomt under the specific head under which it falls since the law leaves no option in the matterBearing these principles in mind, it seems to us obvious that section 8 of the Act which deals with interest on securities is a separate and distinct head, and if an income is chargeable under that head, it is not open either to the assessee or to the department to change the head and claim to tax it under a different head. In the present case, the interest on securities was already charged to tax at the source, and there is no option left to the assessee now to claim that that interest should be treated as part of the income of his business. It is no doubt possible that these securities may be part of the trade assets of an assessee. But that circumstance does not make the interest in respect of such securities which is specifically chargeable under section 8, as part of the profits of the business of the assessee. A person may have more than one activity or operation with reference to one set of property, as for example, in this very case, where he gets his interest on the securities for which no exertion on his part is required ; he may at the same time deal in such securities and make profit. The two activities or operations are entirely distinct. The profits made by him by his dealings in securities may legitimately be brought under section 10 of the Act ; but that is no justification for holding that interest on the securities also forms part of the profits of the business, within the meaning of section 10 of the Act. section 12 cannot be invoked unless the previous heads of income are exhausted. As we held that the interest on securities is chargeable under section 8, the assessee cannot claim that that income should be treated as income from other sources under section 12. section 12 cannot be invoked unless the previous heads of income are exhausted. As we held that the interest on securities is chargeable under section 8, the assessee cannot claim that that income should be treated as income from other sources under section 12. It therefore follows that interest on securities must be treated as income from securities within the meaning of section 8 of the Act and chargeable under that head, and the assessee is not entitled to claim relief of earned income in respect of such interest. The question referred to us must be answered against the assessees and we must hold that that the income should be treated as income from securities within the meaning of section 8. As the assessees have faild they must pay to the respondent his costs which we fix at Rs. 250Reference answered accordingly.