Law:

Section:

Rule 1(x) of the First Schedule to the Companies (Profits) Surtax Act, 1964 - Chargeable profits - Computation of - Assessment year 1967-68 - Assessee was a non-resident company incorporated abroad - During relevant previous year it received certain interest from various companies on loans advanced to them by assessee - It also received certain amount as interest on taxable Government securities - Assessee deducted proportionate expenses from aforesaid interest income and included balance amount in its income which was accepted by ITO while completing assessment under Income-tax Act, 1961 - Whether while computing chargeable profits, net income by way of interest from both sources as computed under Income-tax Act was to be excluded under rule 1(x) and not gross amount of such income received by assessee - Held, yes FACTS The assessee was a non-resident company incorporated abroad. During the previous year relevant to the assessment year 1967-68, it received certain interest from various Indian companies on the loans advanced to them by the assessee. The assessee also received certain amount as interest on taxable Government securities held by it. From these amounts, the assessee deducted certain amounts being the proportionate interest on the funds borrowed by the assessee for advancing aforesaid loans/purchase of Government securities as also proportionate expenses in that connection. The balance amount was included as income from interest in its total income. The ITO accepted it. While computing chargeable profits, the assessee claimed that the interest received by it from Indian companies as well as the interest received on taxable Government securities should be excluded from the total income for the computation of surtax under rule 1 (x) of the First Schedule. The ITO excluded from the total income the net interest received from the Indian concerns only and not that on Government securities. On second appeal, the Tribunal held that interest on taxable Government securities also was liable to be excluded under rule 1 (x)for calculation of surtax. The Tribunal further accepted the assessee's contention that what was liable to be excluded was the 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