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Section 80K, read with section 80AB, of the Income-tax Act, 1961 - Deductions - Dividends attributable to profits and gains - From new industrial undertakings - Whether deduction under section 80K is to be allowed on net dividend income - Held, yes FACTS The question referred to the Supreme Court under section 257, was, whether, having regard to the definition of 'gross total income' under section 80B(5) the Tribunal was justified in allowing deduction under section 80K on the gross dividend income without taking into account deduction for interest paid on moneys borrowed specifically for investment in shares. HELD In view of the decision in Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (SC) and Distributors (Baroda) (P.) Ltd.v. Union of India [1985] 155 ITR 120 / 22 Taxman 49 (SC) deduction under section 80K was not allowable on gross dividend income. CASES REFERRED TO Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (SC) and Distributors (Baroda) (P.) Ltd. v. Union of India [1985]155 ITR 120/ 22 Taxman 49 (SC). S.C. Manchanda, K.P. Bhatnagar and Miss A. Subhashini for the Applicant. ORDER 1. This is a reference, at the instance of the Commissioner, Bombay, to this Court under section 257 of the Income-tax Act, 1961 ('the Act') by the Tribunal. It is not necessary to set out the facts at length since the question referred has already been decided by this Court…

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