TMI Blog1973 (7) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961, and not to deduction of 60 per cent. of Rs. 65,507 under the aforesaid section ? " The assessee is a private limited company. During the accounting year relevant to the assessment year 1969-70, the assessee-company received Rs. 65,507 by way of dividends on the shares held by it in other companies. While making the assessment for 1969-70, the ITO allowed a deduction of Rs. 35,532 under s. 57 of the Act and Rs. 500 under s. 80L of the same Act. The balance amount assessable was fixed at Rs. 26,475. From out of this, 60 per cent. was deducted under s.80M of the Act. The assessee-company contended that the 60 per cent. that has to be deducted is not out of the net dividend under s. 57 but the gross dividend received, namely, Rs. 65,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income attributable to any such industry or industries included in its gross total income for the previous year is not less than fifty-one per cent. of such gross total income. (2) Where a company to which this section applies is entitled also to the deduction under section 80K or section 80L, the deduction under subsection (1) of this section shall be allowed in respect of income by way of dividends referred to therein as reduced by any such income in relation to which the company is entitled to a deduction under section 80K or section 80L." That the assessee is a domestic company is not disputed. That the gross total income of the assessee includes income by way of dividends from domestic company is also not in dispute. In that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e referred to in clauses (ii) and (iii) of sub-section (2) of section 56, deductions, so far as may be, in accordance with the provisions of sub-clause (ii) of clause (a) and clause (c) of section 30, section 31, and sub-sections (1), (1A) and (2) of section 32 and subject to the provisions of sections 34 and 38 ; (iii) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income." In the case of dividends, any reasonable Sum spent for the purpose of realising the dividend on behalf of the assessee is allowed to be deducted. The question is whether the 60 per cent. to be computed for the purpose of s. 80M is to be on the total divide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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