TMI Blog1973 (3) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... department - - - - - Dated:- 14-3-1973 - Judge(s) : P. GOVINDAN NAIR., K. SADASIVAN. JUDGMENT The judgment of the court was delivered by GOVINDAN NAIR J.-The question referred to us by the Income-tax Appellate Tribunal, Cochin Bench, reads as follows : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the shareholder is entitled to a deduction from the tax payable by him under section 49B of the Indian Income-tax Act, 1922, as amended by section 14 of the Finance Act, 1959, even on that portion of the dividend attributable to the profits of the companies assessed to agricultural income-tax which has not been subjected to tax under the Indian Income-tax Act in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill have to be allowed. The deduction contemplated by section 49B is a deduction from the tax payable. So we shall answer the real question. The quantum of the relief will have to be determined with reference to the provisions in section 49B of the Act and those provisions do not relate the quantum of the relief to the quantum of the tax payable by an assessee. The quantum of income-tax payable by an assessee entitled to the benefit of section 49B must naturally vary depending on factors which have nothing to do with the provisions in section 49B of the Act. For instance, as in this case, the fact that the assessee had made a business loss of Rs. 1,06,880 during the concerned previous year, has reduced the quantum of the tax payable by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the tax is on the dividend income alone. Now, turning to section 49B of the Act, we shall read the whole of it : " 49B. Relief to shareholders in respect of agricultural income-tax attributable to dividends.-Where a company pays to a shareholder any dividend out of its profits and gains which is assessed to agricultural income-tax by any State Government, the shareholder shall be entitled to a reduction from the tax payable by him under this Act, of a sum equal to (a) that proportion of the agricultural income-tax (including super-tax, if any) paid by the company as the amount of the dividend attributable to the profits of the company assessed to agricultural income-tax bears to its total profits assessed to agricultural income-tax, re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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