TMI Blog2000 (8) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 11 of the Income-tax Act, 1961, for the whole of the assessment year 1974-75, or it should have been granted with effect from December 1, 1973, in view of the amendment of clause (xiv) of article 103 of the articles of association of the company effected on December 1, 1973, prohibiting distribution of dividends to the members ?" The respondent-assessee is a public limited company formed with the object of promoting and regulating the business of shares, stocks and securities. Since its incorporation, it is engaged in the business of stock exchange. The assessment year involved is 1974-75 for which the relevant accounting period ended on March 31, 1974. As in the past, the assessee claimed exemption under section 11 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sole grievance of the Revenue before the Tribunal was that under the amended articles of association the exemption under section 11 of the Act was admissible to the assessee only from December, 1973, when the articles of association were amended and not in respect of the period prior to the said date. In other words, according to the Revenue, the exemption was admissible only for a part of the year and not for the whole of the year under consideration. The stand of the Revenue did not find favour with the Tribunal. The Tribunal observed that the said amendment having taken place in the relevant accounting period, i.e., commencing from April 1, 1973, and ending on March 31, 1974, the amendment covered the whole of the financial year 1973- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed under the Act and exemption under section 11 has to be allowed only in respect of that part of the income which is actually applied for the purposes of the trust in India during the previous year to which the income relates or which is deemed to have been applied to such purposes during such previous year under the option specified in the section. The balance income has to be subjected to tax as if such income were the total income for the previous year. In the instant case, as noticed above, exemption under section 11 was disallowed in the past and in the present year only on the ground that the articles of association do not expressly prohibit the declaration of dividend, etc., to the shareholders and not for any other reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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