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Section 86A of the Income-tax Act, 1961-Incomes forming part of total income on which no income-tax is payable-Deduction from tax on certain securities-Assessee received dividend from statutory corporations, which was held to be "interest on securities" within the meaning of section 18-Whether assesses entitled to relief under section 86A on gross amount of dividend received-Held, on facts, yes Facts During the accounting year relevant for the assessment year 1968-69, the assessee had received dividend from statutory corporations, which was held to be "interest on securities" within the meaning of section 18. The Tribunal held that the assessee was entitled to relief under section 86A on the gross amount of dividend received, i.e., without deduction of the expenses incurred for earning the same. On reference: Held In view of the facts and circumstances of the case, the language used in section 86A and the principles laid down by the Supreme Court in the case of CIT v. South Indian Bank Ltd. [1966] 59 ITR 763 and by this Court in the case of CIT v. Darbhanga Marketing Co. Ltd. [1971] 80 ITR 72, the Tribunal was right in holding that the assessee was entitled to relief under section 86A on the gross amount of dividend received from statutory corporations. Cases referred to CIT v. Darbhanga Marketing Co. Ltd. [1971] 80 ITR 72 (Cal.), CIT v. South Indian Bank Ltd. [1966] 59 ITR 763 (SC) andCloth Traders (P.) Ltd. v. Addl. CIT [1979] 118 ITR 243 (SC). Judgment Sabyasachi Mukharji J.-This reference relates to the assessment year 1968-69. We have been referred the following question under section 256(1) of the Income-tax Act, 1961: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to relief under section 86A of the Income-tax Act, 1961, on the gross amount of dividends received from statutory corporations which was held to be 'Interest on securities' within the meaning of section 18 of the said Act ?" As we have mentioned before, the relevant assessment year is 1968-69, for which the previous year is 1967. Now, in deciding this appeal, the Tribunal has referred to its decision in the previous…

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