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2015 (7) TMI 572 - HC - Income TaxEntitlement to deduction of gross dividend under Section 80-M - Whether Tribunal was correct in allowing the deduction whereas the Apex Court had in Distributors Baroda Pvt. Ltd. (1985 (7) TMI 1 - SUPREME Court ) held that only net dividend is deductible? - Held that:- It is undisputable that the Hon'ble Supreme Court in Distributors (Baroda) Pvt. Ltd. (supra) has held that deductions under Section 80-M would not be of the gross amount but of the net amount of dividend received i.e. after deducting the interest paid on monies borrowed. In the facts before the Hon'ble Apex Court, the Distributors (Baroda) Pvt. Ltd. borrowed to invest in shares for earning dividend income. Thus the decision in the case of Distributors (Baroda) P. Ltd. (supra) is distinguishable in facts as in those facts there was interest paid on money borrowed to make investment in companies which resulted in income to the assessee therein. This is not so factually in this case. The decision of the Apex Court would have no application in the present facts and hence gross dividend and net dividend received is the same. In the present facts, as amply demonstrated in the impugned order, the respondent-assessee had its own funds available to make the investment. Therefore, the presumption as set out in Reliance Utilities & Power Ltd. (2009 (1) TMI 4 - HIGH COURT BOMBAY) would apply, which presumption the revenue has not disturbed. Moreover, for the earlier assessment year, the revenue has extended the benefit of deduction under Section 80-M as claimed by the respondent-assessee without deducting any amount. In view of the above, the impugned order has granted deduction under Section 80-M of the Act as claimed. - Decided against revenue. Profits of the Marketing Division of the respondent Company - whether entitled for deduction under Section 80IB - Held that:- The impugned order the Tribunal has upheld the respondent's claim for deduction under Section 80I of the Act by merely following its own decision in the case of Hindustan Petroleum Corpn. Ltd. [1989 (7) TMI 150 - ITAT BOMBAY-B ]. In the above decisions wherein in respect of identical issue, this Court has held that deduction under Section 80I of the Act refers to profits and gains from industrial undertaking. It held that manufacturing, processing and marketing are part of the industrial undertaking.- Decided against revenue.
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