TMI Blog1986 (1) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... nate expenditure and bank interest which was relatable to the earning of such dividend income : The assessee thereafter applied before the Income-tax Officer under section 154 of the Act for rectification of the assessments claiming allowance of the relief under section 85A on the gross dividend. The Incometax Officer rejected the said application of the assessee holding that the relief under section 85A had been granted according to law and there is no mistake apparent from the records. Aggrieved by the order of the Income-tax Officer, the assessee preferred appeal from the same before the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner, the assessee relied on the decision of this court in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Assistant Commissioner. The Tribunal specifically held that section 85A contemplated relief only on the net dividend income and not on the gross dividend income and, therefore, there was no mistake in the order of assessment which could be rectified. On an application of the assessee under section 256(1) of the Act, the Tribunal has referred the following question as a question of law arising out of the order of the Tribunal for the opinion of this court: " Whether, on the facts and in the circumstances of the case and on a proper interpretation of section 85A of the Income-tax Act, 1961, the Tribunal was correct in its view that the deduction under the said statutory provision was allowable with reference to the net dividend inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intended to give relief with reference to the full amount of dividend received from the paying company when that is not the amount which is liable to suffer tax once again in the hands of the assessee. The Legislature could certainly be attributed with the intention to prevent double taxation but not to provide an additional benefit which would go beyond what is required for saving the amount of dividend from taxation once again in the hands of the assessee. Bearing in mind these prefatory observations in regard to the legislative object, we may now proceed to construe the language of section 80M...... (at page 136). We may assume with the court in Cloth Trader's case [1979] 118 ITR 243, that the words I where the gross total income of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we can make a dichotomy between the category of income by way of dividends included in the gross total income and the quantum of the income by way of dividends so included...... (at pages 137 and 138). It is, therefore, clear that whatever might have been the interpretation placed on clause (iv) of sub-section (1) of section 99 and section 85A, the correctness of which is not in issue before us, so far as sub-section (1) of section 80M is concerned, the deduction required to be allowed under that provision is liable to be calculated with reference to the amount of dividend computed in accordance with the provisions of the Act and forming part of the gross total income and not with reference to the full amount of dividend received by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court advisedly and on consideration of the issues before it, pronounced on the interpretation of section 80M only and not on the earlier section, viz., section 85A of the Act. So far as the earlier sections are concerned, the Supreme Court made it quite clear that the correctness of the said sections was not in issue before the court and further that another view possibly could be taken on the same sections. The Supreme Court also did not pronounce whether the views expressed earlier on the earlier section were incorrect. The observations of the Supreme Court are as follows (at page 131): " But here again we are not concerned in inquiring whether the view taken by the Bombay High Court in CIT v. New Great Insurance Co.'s case [1973 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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