TMI Blog2000 (12) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... om other domestic companies. The computation of the deduction under section 80M is required to be made in accordance with section 80AA. Section 80AA captioned as computation of deduction under section 80M reads as under : "Where any deduction is required to be allowed under section 80M in respect of any income by way of dividends from a domestic company which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, the deduction under that section shall be computed with reference to the income by way of such dividends as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) and not with reference to the gross amount of such dividend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BOM, be ignored and that amount excluded under section 37(3) in cases where an assessee has income from dividends as also from business, although section 37 provides for the deduction of the amount of interest paid in respect of the capital borrowed for the purpose of business or profession. To the extent the interest charged is capable of being regarded as expenditure laid out or expended wholly and exclusively for the purpose of making or earning dividend income, the interest so paid must be deducted under section 57(iii) before computing the benefit under section 80M. Learned counsel for the assessee submitted that the entire amount of interest claimed by a dealer in shares, having a dividend income is required to be allowed under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure laid out wholly and exclusively for the purpose of earning dividend income. The amount of such interest is required to be deducted under section 57(iii) before computing the amount of the dividend on which the benefit under section 80M was required to be allowed. The view of the Tribunal to the contrary, therefore, cannot be upheld. We, therefore, answer the question as to whether, on the facts and circumstances of the case, relief under section 80M is to be granted on the gross amount of the dividend received by the assessee or on the gross amount as reduced by the interest attributable to the money borrowed for the purpose of investment and the expenditure incurred in realising the dividend income, by holding that the relie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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