Law:

Section:

section 85a [as it stood prior to 1-4-1968] and section 80m of the income-tax act, 1961-deductions in respect of certain inter-corporate dividends-whether rebate of income- tax was admissible on actual amount of dividend received by assessee-company from domestic company or it was confined only to dividend income as computed after allowing deductions in accordance with the provisions of the act-held that rebate was admissible on actual amount of dividend received by assessee-company Facts In view of divergent views expressed by the Gujarat High Court on one hand and the Bombay, Madras and Calcutta High Courts on the other, direct references were made by the Tribunal raising a short question of proper construction of section 85A [as it stood prior to 1-4-1968] and section 80M as to whether on a true interpretation of those provisions, rebate of income-tax was admissible on the actual amount of dividend received by an assessee-company from an Indian company or it was confined only to the dividend income as computed in accordance with the provisions of the Act, that is, after making the deductions specified in section 57 including deduction of interest paid on borrowings for making the investments. The Gujarat High Court, while dealing with a case relating to the assessment years 1965-66 and 1966-67, when section 85A was in force, constructed the words "such income" occurring in that section, to be referable to the quantum of income includible in the gross total income, and, therefore, took the view that the rebate of income-tax was confined only to the dividend income after making deductions. The Bombay, Madras and Calcutta High Courts, however, took a contrary view that the deduction permissible was to be calculated with reference to the full amount of dividends received from the domestic company and not with reference to the dividend income as computed after making deductions in accordance with the provisions of the Act. On an appeal and a direct reference made by the Appellate Tribunal to the Supreme Court: Held It is clear on a plain natural construction of the language of the provisions of sections 85 A and 80M that rebate of income-tax is available in…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492