TMI Blog1983 (9) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Income-tax Officer was not entitled to set off loss under the head 'Business' from the dividend income while computing the rebate under section 85A for the assessment years 1966-67 and 1967-68? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Income-tax Officer was not entitled to deduct from the gross dividend income the proportionate expenditure claimed to be allocable to the earning of dividend while calculating rebate under section 85A of the Income-tax Act, 1961, for the assessment years 1966-67 and 1967-68 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the rebate under section 85A of the Income-tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Indian company " which can only be the full amount of dividend received from an Indian company. The words " income so included " do not refer to the quantum of the income included but only to the category of the income included, viz., " income by way dividends from in Indian company ". In other words, no amount of expenditure was deductible or no business loss was to be set off from the gross amount of dividend by reference to which the relief under s. 85A was to be given. Questions Nos. 1 and 2 are answered against the Department. So far as question No. 3 is concerned, we need not answer this question. The scheme of s. 85A was that the rebate would be given only in respect of tax in excess of 25% of the total liability. To the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1967. It is out of the total holding of 6,94,108 shares that the assessee sold 93,930 shares. It was not disputed before the income-tax authorities that the shares sold were the same which were held by the assessee on or before January 1, 1954. The only question was as to what was the market price of the shares as on January 1, 1954, which had to be taken into account while determining the assessee's capital gains. The AAC of Income-tax took the view following the law laid down by the Supreme Court in Shekhawati General Traders Ltd. v. ITO [1971] 82 ITR 788 and the Tribunal upheld the finding of the AAC. The Supreme Court held (p. 793): " Where the capital asset became the property of the assessee before the first day of January, 1954, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ascertainment of the fair market value of the shares in question on January II 1954, any issue of bonus shares or right shares subsequent to that date was wholly extraneous and irrelevant and could not be taken into consideration. Question No. 5 is answered against the Department. As regards the question at the instance of the assessee in I.T.Rs. Nos. 96 and 97 of 1975, in view of our answer to questions Nos. 1 and 2 in I.T.Rs. Nos. 84 to 89 of 1975, the answering of the reference at the instance of the assessee would be purely academic as the reassessment proceedings could only be an exercise in futility. If the reassessment proceedings, assuming that they were validly initiated, are pursued further by the income-tax authorities, they w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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