Grover, J. ( 1 ) THIS is a reference under section 66 (1)of the Indian Income-tax Act, 1922 (to be REFERRED TO as the Act)made by the Appellate Tribunal, of the following question :-" Whether m the circumstances of the case, expenditure in excessof income (i. e. negative income) could be allowed under section 8 ?"on 23/05/1949, the assessee purchased debentures of a company, called Messrs Malwa Vanaspati and Chemical Ltd. , Indore, fora sum of Rs. 7,00,000. 00. The price of the debentures was paid by the assesseepartly from the funds available with him and partly from a loan in thesum of Rs. 4,90,000. 00 taken by him from the Bank of Bikaner, Bombay. For the assessment years 1953-54, and 1954-55 to which this reference relates, the assessee received no interest on the aforesaid debentures. He however, paid interest to the Bank of Bikaner on the money which had been borrowed by him for purchasing them. It appears that the assesseederived income from some other debentures. During the assessment year 1953-54 the total income from debentures was shown as Rs. 2,130. 00 and against that interest and expences claimed were shown to be Rs. 20,629. 00. Similarly, for the assessment year 1954-55 a sum of Rs. 5048. 00 was shown as income from debentures and against that a sum of Rs. 17. 026. 00 was claimed on account interest and expenses. Thus, for the year 1953-54 loss (negative income) was claimed amounting to Rs. 18,490. 00. and forthe subsequent year this figure was shown at Rs. 11,980. 00. The Income-tax Officer disallowed these items. The Appellate Assessment Commissioner allowed the deductions claimed by the assessee for these years and also for certain other years )the total period being of five years ). The Department filed appeals before the Appellate Tribunal. By a common orderdated 28/10/1961, the Tribunal set aside the decision of theappellate Assessment Commissioner and upheld the order of the Income-tax Officer. Subsequently, there was some settlement between the assesseeand the Department, and no dispute was left with regard to the assessment years 1950-51, 1951-52 and 1952-53. But for the two subsequentyears, there was no settlement and since no deduction had been allowedto the assessee as claimed by him for those years, he moved thetribunal for referring the question, mentioned above. Subsequently, there was some settlement between the assesseeand the Department, and no dispute was left with regard to the assessment years 1950-51, 1951-52 and 1952-53. But for the two subsequentyears, there was no settlement and since no deduction had been allowedto the assessee as claimed by him for those years, he moved thetribunal for referring the question, mentioned above. ( 2 ) THE Appellate Tribunal examined the language of section 8 ofthe Act, which, indisputably, is applicable in this case, pointing out the unhappy wording employed in the first proviso to that section. A distinction was made between the words "no tax is payable" and "deductionsor allowances" as employed in other sections of the Act, and it was heldthat no negative income or los could arise under the head "interest onsecurities" under section 8. ( 3 ) OUR attention has been invited by the learned counsel for the assessee to various provisions of the Act, some of which may be mentioned. Under section 3 income-tax is charged for any years in respect of thetotal income of the previous years. According to section 2 (15) "total incomemeans total amount of income, profns and gains computed in the mannetlaid down in the Act. Section 6 gives the "heads of income chargeableto income-tax. " These are- " (I) Salaries. (ii) Interest on securities. (iii) Income from property. (iv) Profits and gains of business, profession or vocation. (v) Income from other sources. (vi) Capital gains. ". Section 7 deals with the first head "salaries," and Section 8 with " Whether in the circumstances of the case, expenditure in excessof income (i. e. negative income) could be allowed under section 8 ?"assessee can deduct or claim as an allowance the amount of interest which he pays to the creditor on the borrowed money under the head interest on securities", so as to be able to claim a set-off under section ( 4 ) F the income is negative and more in the nature of a loss, as in the present case. On behalf of the Dapartment, the contention was and isthat section 8 is worded differently from the sections relating to otherheads and that shows that the intention of the legislature was to treatthe aforesaid head distinctly and differently from the other heads. On behalf of the Dapartment, the contention was and isthat section 8 is worded differently from the sections relating to otherheads and that shows that the intention of the legislature was to treatthe aforesaid head distinctly and differently from the other heads. ( 5 ) THE learned counsel for the assessee has invited our attention to the statement contained in clause 19 of the draft Bill which later onwas incorporated in section 19 of the Income-tax Act of 1961. That section makes it clear that the income chargeable mder the head "intereston securities" shall be computed after making the following deductions :- "any reasonable sum expended by the assessee for the purpose ofrealising such interest; (ii) any interest payable on money borrowed for the purpose of investment in the securities by the assessee. "it is sought to be argued from the comments relating to clause 19 of the draft Bill that the intention always was the same which has now been expressed and declared in section 19 of the Act of 1961. It is, however, not permissible to refer to any statement contained in the draft Bill relatingto an enactment for the purpose of interpreting a section in that enactment much less in a subsequent enactment The learned counsel for the assessee has also not been able to show how according to the establishedcanons of interpretation of statutes, section 19 of the Act of 1961 should be regarded as declaratory of the provisions contained in section 8 of the Act. Reliance has been placed on the view expressed by the learnedauthor of the law of Income-tax in India by V. S. Sundaram (8th Edition)at page 383 that the net income under section 8, after deducting theinterest paid out, can be negative ; and in that case the loss can be setoff under section 24 against other heads of income, and the fact that ona certain item "no tax is payable" and that it is not called an "allowance" would not seem to be material. ( 6 ) THE question, which we are called upon to answer, is res Integraand does not appear to have come up directly for consideration in anyother case. ( 6 ) THE question, which we are called upon to answer, is res Integraand does not appear to have come up directly for consideration in anyother case. It is needless to reiterate the view that the language of theproviso to section 8 is very unhappy and indeed has been describeed as "crude" by Chakaravarti C. J. in United Commercial Bank Ltd v. Commissioner of Income-tax West Bengal. There are certain observationsin the aforesaid Calcutta case which may be noticed as these are withrespect, helpful in understanding the scope of the proviso to section 8. It was observed at page 432-- "what, the first proviso to section 8 says is that in cases wherethe securities, from which the interest charged to tax is deriyed, have been acquired with money "borrowed for the purpose, the assesseewill be allowed to deduct the interest payable on the moneys soborrowed and invested. The reason is plain, because the interest paidon the borrowings is expenditure incurred for the purpose of earning the interest income which is charged to tax. But as regards tax-freesecurities, the third proviso to section 8 exentpta the interest recievedon such sectirities from tax liability altogether and there is no valid reason why an assessee, while paying no tax to the State on a particular item of income should yet receive from the State Credit for theexpenditure incurred for earning that income. Section 8 does not, inmy view, provide for any such credit. "the observations in the Calcutta case do lend support to the contention put forward on behalf of the Commissioner for taking the view which was accepted by the Appellate Tribunal. In this connection the importance of the provision contained in the proviso relating to sumsexpended for the purposes of realising interest on the securities are debentures must be considered. The use of the word "such" before "interest"necessarily refers to the interest receivable on the securities, therefore, only a reasonable sum expended for the purposes of realising the interestcan be deducted and it follows that if no interest is realised the assesseecan not claim deduction of any expences for such realisation. Thus theintention clearly is to allow deduction only when there has been incomeby way of interest on the securities. Thus theintention clearly is to allow deduction only when there has been incomeby way of interest on the securities. The words "in respect of any interestpayable on money borrowed for the purpose of investment in the securities immediately follow the provision relating to expences incurred for thepurpose of realising interest. The same meaning, therefore, should normallybe attributed to these words, namely, that such interest paid on borrowedcapital would be deductible only if there is receipt of interest. It is also significant, as has already been mentioned before that the phraseology employed in section 8 is different and distinct from the phraseology usedin the sections relating to other heads and the provisions made there inwith regard to the allowances which can be claimed as permissible deductions. We are, therefore, of the opinion that the view taken by the Appellate Tribunal in the matter was correct. The answer to the question referred would be in the negative, ( 7 ) IN view of the nature of the point involved the - parties are left to bear their own costs.