9911796707
TMI Blog1973 (6) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... so shares in other domestic companies. These latter companies have distributed dividends to the shareholders during the accounting years relevant to the above-mentioned assessment years of the assessees. These dividends have been reckoned under the head "income from other sources" in computing the total income of the assessee-companies. Under section 80M of the Income-tax Act, a sum equal to 60% of such income by way of dividends paid to the assessees by the other companies is to be deducted in computing the total income for the purpose of assessment of these assessees. The Income-tax Officer computed the total income of these assessees for these relevant years and determined the tax payable. Thereafter, he proceeded to calculate the rebate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief by way of rebate to be given on the basis of the total dividend for each year attributable to the profits of the company assessed to agricultural income-tax. The revenue claimed a reference to this court of the following question in I.T.R. No. 77 of 1971: " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the deduction granted in respect of dividends under section 80M of the Income-tax Act, 1961, ought not to have been considered in determining the amount of relief admissible under section 235 of the Act ? " The questions referred in the other two cases are also similarly worded and, therefore, they are not repeated here. Dividends declared by companies assessed to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction is re-enacted as section 235 in the present Act with a slight change in respect of the percentage of the dividend granted as relief. Under the new Act until recently the entire dividend whether attributable to the profits of the company assessed to agricultural income-tax or not was reckoned in computing the total income of the assessees. Then there was no difficulty in applying section 235 to grant the relief. This position continued even after section 85A was added by Finance Act 1 of 1965. Section 85A provided only for deduction of tax on a percentage of the dividends reckoned in the total income. Section 85A was repealed and section 80M was enacted by the Finance Act of 1968. Under section 80M, 60% of the dividend of the domestic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under this Act but not exceeding income-tax calculated at the rate of twenty-seven and a half per cent. and (ii) is a company, twenty-seven and a half per cent., on that portion of the dividend which is attributable to the profits of the company assessed to agricultural income-tax whichever is less. " As per the language of the section, from the tax payable by the shareholder under the Income-tax Act the lesser of the two sums calculated under that section has to be reduced and that calculation is to be made taking into account the dividend paid by the company to the shareholder. Though by section 80M, 60% of the dividend is to be deducted in computing the total income of an assessee-company, the relief by way of reduction of tax under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
