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TMI Blog1969 (4) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt under section 256(1) of the Income-tax Act, 1961 : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to relief under secticn 99(1)(iv) of the Income-tax Act, 1961, in respect of Rs. 85,201 and not on the said amount reduced by Rs. 10,290 being interest on money borrowed for earning the said dividend ?" Mr. B.L. Pal, learned counsel for the revenue, contended that section 99 of the Act under which this question has been decided is in Chapter II with the heading " Income forming part of the total income on which no super-tax is payable". Mr. Pal contended that income which formed part of those incomes have been computed in accordance with the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the present provision, we do not think that it will be relevant to discuss the case in detail. The next case relied on by Mr. Pal was the decision of the Calcutta High Court in the case of Commissioner of Income-tax v. Samnugger Jute Factory Co. Ltd. wher it was held that the words "any sums" in section 15B(1) of the Indian Income-tax Act, 1922, must be sums assessable in their nature, being parts of the assessable income out the relative accounting year and sums brought into the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Pal drew inspiration from this passage in support of his argument that anything which has not entered into the computation of the total income cannot merit calculation in determining the exemption from super-tax as contemplated under section 99 of the Income-tax Act, 1961. The next case on which reliance was placed by Mr. Pal was the decision of the Supreme Court in the case of Nalinikant Ambalal Mody v. S. 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 sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larly referred to the passage at page 766 where the Supreme Court has observed : " The expression 'interest receivable on income-tax free loans' is clear and unambiguous ..... 'Interest receivable' can only mean the amount of interest calculated as per the terms of the securities. It cannot obviously mean interest receivable minus the amount spent in receiving the same." It has to be observed, however, that Mr. B. L. Pal made some argument to the effect that that case has to be understood specially under the notification which fell for consideration before the Supreme Court in respect of that case. Dr. Pal also drew our attention to the decision of the Bombay High Court in the case of Commissioner of Income-tax v. Industrial Investment Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 assessee in respect of the "amounts" of "any dividend re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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