Law:

Section:

Section 80M of the Income-tax Act, 1961 - Deductions - Inter corporate dividends The deduction as permitted is of an amount equal to so much of the amount of income by way of dividend declared by the company as does not exceed the amount of dividend distributed by the assessee-company on or before the due date. It is clearly seen that the section does not provide for the nature of the dividend distributed by the assessee-company. It does not state that the nature of the dividend distributed must be for the financial year under assessment. Laying down such restricting qualification will amount to doing violence to the plain and clear meaning of the words as contained in section 80M. [Assessment year 1997-98] Vinod Gupta and P.S. Sahadevan for the A ppellant. J.D. Mistry and Raj Darak for the R espondent. JUDGMENT R.S. Mohite, J.-The two questions of law, sought to be raised by the appellant in the appeal are as set out in paragraph 5 of the memo of appeal and are as under : "(i)Whether, on the facts and in the circumstances of the case and in law, the hon'ble Tribunal was justified in dismissing the appeal of the Revenue by relying upon its own order, vide I.T.A. No. 462/ Mum/2002 dated May 10, 2002, in the case of M/s. Silvassa Industries (P.) Limitedand directed the Assessing Officer to allow the deduction under section 80M of the Income-tax Act, 1961, of Rs. 2,19,97,105 as against Rs. nil ? (ii)Whether, on the facts and in the circumstances of the case and in law, the hon'ble Tribunal is correct in law in allowing deduction under section 80M of the Income-tax Act of Rs. 2,19,97,105 for the assessment year 1997-98 even though the dividend distributed is interim dividend related to the assessment year 1998-99 ?" The brief facts of the case are as follows : (a)During the financial year 1996-97, the assessee-company filed a return which included dividend income of Rs. 2,69,16,774. During this financial year, since the assessee-company earned a net profit of Rs. 0.06 lakhs only, no dividend was declared by the company. The due date for filing the tax returns for the financial year was November 28, 2007(?). Before this due date the assessee-company declared and…

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