Law:

Section:

Part II of the first schedule to the Finance Acts, 1964 and 1965 - Reduction of rebate of super-tax - Whether it is legal and proper to reduce the rebate of super-tax at 7.5 per cent on whole of the amount of the dividend other than the dividend on the preference shares - Held, yes Section 2(5)(a)(i)/(ii) of the Finance acts, 1964 and 1965 - Rebate - Computation of - Whether amount of rebate allowable under section 2(5)(a)(i) and (ii) should be calculated by including in export turnover the amount representing drawback of customs duty and refund of excise duty but not the amount representing premium gain on value of yarn entitlement - Held, yes Section 43(1), read with sections 32 and 33, of the Income-tax Act, 1961 - Actual cost - Assessee wanted to instal new looms but it could not get statutory permission for their purchase and was advised that permission could be granted for replacement of old looms by purchase of new looms - therefore, assessee purchased old looms and thereafter replaced them with new looms for a sum of Rs. 11,09,794 - After adjusting scrap value of old looms expenditure incurred by assessee on their purchase was Rs. 3,20,477 - Whether this amount of Rs. 3,20,477 was includible in the cost of new looms for the purpose of allowing depreciation and development rebate - Held, on facts, yes Facts The assessee, a public limited company, was carrying on various business activities. During the assessment years 1964-65 and 1965-66, for which the accounting years ended on 31-3-1964 and 31-3-1965, respectively, the assessee declared dividend on equity shares of Rs. 62.5 lakhs. The ITO withdrew the rebate on this dividend at the rate of 7.5 per cent in accordance with the provisions of the second proviso to the relevant paragraph of Part II of the First Schedule to the relevant Finance Acts, i.e., 1964 and 1965. The ITO also rejected the claim of the assessee that the amount of rebate allowable under section 2(5)(a)( i) and (ii) of the Finance Acts, 1964 and 1965 in force, should be calculated by including in the turnover the amounts representing drawback of customs duty, refund of excise duty and premium gain on the value of yarn entitlement. The…

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