Law:

Section:

First Schedule to the Companies (Profits) Surtax Act, 1964 - Chargeable profits - Computation of - Assessment years 1979-80 and 1980-81 - Whether net dividend is to be deducted while computing chargeable profits under rule 1(viii) of First Schedule - Held, yes FACTS The contention of the assessee which was accepted by the Tribunal was that the total dividends received by the assessee shall have to be deducted while computing the chargeable profits under the provisions of the Surtax Act while the contention of the revenue was that the net dividend arrived at after the deductions permitted under the provisions of the Income-tax Act, 1961 was the dividend that would have to be deducted. On reference: HELD While computing the total income for the purpose of income-tax only the net dividend is added. If so, whatever is to be deducted again for the purpose of charging the profits under the Surtax Act cannot go beyond what was added earlier. Thus, the assessee is entitled to deduct net dividends and not gross dividends for the purpose of computing chargeable profits under rule 1(viii) of the First Schedule. CASE REVIEW Distributors (Baroda) Pvt. Ltd. v. UOI [1985] 155 ITR 120 (SC) and CIT v. Hindustan Gum and Chemicals Ltd. [1990] 182 ITR 396 (Cal) and CIT v. Andhra Bank Ltd. [1990] 186 ITR 192 (AP)followed and relied upon. CASES REFERRED TO Distributors (Baroda) (P.) Ltd v. UOI [1985] 155 ITR 120 (SC), Cloth Traders (P.) Ltd. v. Addl. CIT [1979] 118 ITR 243 (SC), CIT v. Hindustan Gum & Chemicals Ltd [1990] 182 ITR 396 (Cal.),CIT v. Andhra Bank Ltd. [1990] 186 ITR 192 (AP), CIT v. Sundaram Industries (P. ) Ltd [1985] 151 ITR 769 (Mad.), CIT v. Jiyajeerao Cotton Mills Ltd [1985] 154 ITR 323 (Cal.) and CIT v. United India Fire & General Insurance Co. [1990] 182 ITR 355 (Mad.). Chander Kumar and S.R. Shivaprakash for the Applicant. G. Sarangan for the Respondent. ORDER Bhat, J. - In these references, under section 256(2) of the Income-tax Act, 1961 ('the Act') the following question requires to be answered: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the assessee is entitled to deduct gross…

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