TMI Blog1969 (4) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 1,76,584 and allowed deduction of Rs. 21,326 being interest paid to various parties on moneys borrowed in connection with investments. The Income-tax Officer then worked out the chargeable dividend income at Rs. 1,55,258 inasmuch as the assessee was entitled to exemption under section 89(1)(ii) (sic. 99(1)(iv)) of the Income-tax Act, 1961, the Income-tax Officer worked out the gross amount of dividend income exempt under that section at Rs. 85,201 and reduced it by a sum of Rs. 10,290, being the amount paid in so far as it was attributable to the aforesaid dividend income. The Income-tax Officer, therefore, worked out that as against the gross amount of dividend of Rs. 85,201, the assessee was entitled to exemption under section 99(1)(iv) of the said Act only in respect of Rs. 74,911. There was an appeal before the Appellate Assistant Commissioner. It was contended that exemption from super-tax under section 99(1)(iv) of the Income-tax Act, 1961, was limited to the amount specified in the sub-section in so far as they were included in the total income. Since the amount of dividend exempt under section 99(1)(iv) of the Income-tax Act, 1961, included in the total income was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drew our attention to the various provisions of the Indian Income-tax Act, 1922, namely, section 2(15), section 6, section 12(1A), section 12(2), section 16, section 4(3)(i), and section 14 of the Indian Income-tax Act, 1922. He also drew our attention to the provisions of section 2(45), section 56 and section 66 of the Income-tax Act, 1961 Mr. Pal also drew our attention to the decision of the Bombay High Court in the case of Ambika Silk Mills Co. Ltd. v. Commissioner of Income-tax. There it was held that under section 17(7) of the Indian Income-tax Act, 1912, the relief to which a company was entitled in respect of super-tax was on the amount which was included as income chargeable under the head of "Capital gains". Consequently, when the total income in any year of a company consisted entirely of a residue of capital gains remaining after set-off against the total capiital gains of that year of loss from business, the amount by which the super-tax payable by them should be reduced should be computed on the total amount of the capital gains and not on the residue of capital gains remaining after set-off. In view of what the Bombay High Court were considering and the language of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A. L. Narayan Row, Commissioner of Income-tax. Mr. Pal relied on this decision of the Supreme Court for the argument that there is no warranty for the assumption that whatever is included in the total income under section 4 must be liable to tax. Section 3 does not provide that the entire total income shall be chargeable to tax. It says that the chargeability of the income has to be in accordance with and subject to the provisions of the Act. The income has, therefore, to be brought under one of the heads in section 6 of the Act and can be charged to tax only if it is so chargeable under the computing section of that Act. Mr. Pal contended that to hold contrary to his submission would amount to giving double relief to the assessee, which according to him was not warranted by the provision of the statute. Dr. Devi Prasad Pal, learned counsel for the assessee, on the other hand, contended that on a proper and strict interpretation of the language of the provision it would be manifest that relief was contemplated under section 99(1)(iv) of the said Act in respect of dividend received. To exclude from the dividend something which the assessee has received would be contrary to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation or body, on which super-tax has already been paid by the association or body, as the case may be ; (iii) any dividends received by assessee from a co-operative society as a member thereof ; (iv) if the assessee is a company, any dividend received by it from an Indian company, subject to the provisions contained in the Fifth Schedule ......" The relevant sub-clause which falls for consideration in the instant reference is sub-clause (iv) of section 99(1) of the said Act which exempts any dividend received by it from any Indian company, subject to the provisions contained in the Fifth Schedule. The Fifth Schedule provides that the super-tax shall not be payable by any company in respect of any dividend which is assessable for the assessment year commencing on the 1st day of April, 1962, upon certain terms and conditions. In order to merit exemption from super-tax the amount must clearly come within the provisions of the section dealing with that exemption, namely, section 99 of the said Act. Provisions of this nature must receive strict construction. Bearing that in mind, it is manifest, in our opinion, that under section 99, super-tax shall not be payable by an assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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