TMI Blog1991 (6) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... for income-tax purposes. It may be noted that in terms of sec. 80M of the Income-tax Act, 60% of the gross dividend income is allowed as deduction and the balance 40% only is included in the total income. The corresponding figures for these three years are furnished by the assessee as follows : Sl No Asst. year Gross dividend 40% dividend Difference 1. 1978-79 7,920 3,168 4,752 2. 1979-80 59,250 23,700 35,550 3. 1980-81 3,97,506 1,59,003 2,38,503 Departmental authorities have excluded only the 40% of the dividend income, which is included in the total income, while assessee's claim is that the whole of the gross dividend should be so treated as covered by Rule 1 (viii) of the First Schedule to the Companies (Profits) Surtax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome and hence it implies that what is not included in the total income cannot qualify for exclusion. He further submitted that at any rate, the Supreme Court decision in Distributors (Baroda (P.) Ltd. v. Union of lndia [1985] 155 ITR 120, had specifically reversed the view taken in earlier decisions by various High Courts and Supreme Court, ending with the Supreme Court decision in Cloth Traders (P.) Ltd. v.Addl. CIT [1979] 118 ITR 243. He submitted that up to the stage of Supreme Court decision in Cloth Traders (P.) Ltd.'s case judicial pronouncements could have justified the exclusion of the gross dividends, but not after the Supreme Court decision in Distributors (Baroda) (P.) Ltd.'s case. He further submitted that in the last cited deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1978-79 that only that can be excluded, which has been included. If only 40% of the gross dividend is included in the total income, it is that 40% only, which can be excluded. Where is the question of excluding what is not included in the total income ? 7. Coming to the case-law, we do not agree with the reply of the learned chartered Accountant for the assessee that the Supreme Court decision in Distributors (Baroda) (P.) Ltd.'s case should not make any difference. We may first note that vide para marked 1 on page 2 of the order of the CIT(A), assessee had relied on the following three decisions---- (a) CIT v. New Great Insurance Co. Ltd. [1973] 90 ITR 348 (Bom.) (b) Cloth Traders Ltd.'s case (c) A.V. Thomas C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-tax and the exemption was not limited to dividend income computed in accordance with the provisions of the Act and forming part of the ' total Income '." In our opinion, it is obvious that though the Supreme Court in Distributors (Baroda) (P.) Ltd.'s case specifically noted and over-ruled only a few decisions, logically speaking, it must be held that the earlier approach taken in whatever decision and under whatever enactment stood over ruled. We may now note specifically the Bombay High Court decision in Jupiter General Insurance Co.'s case and extract below the concluding and operating part of the said decision in the following terms------- ". . . On a plain reading of the said clause occurring in item (viii) the Tribunal took the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act stand over-ruled, it is but logical to infer that the Hon'ble Bombay High Court decision in Jupiter General Insurance Co.'s case need not be followed in view of the subsequently delivered judgment of the Supreme Court in Distributors (Baroda) (P.) Ltd.'s case. We may also note that as indicated already, the facts of the case in Jupiter General Insurance Co.'s case were n ot on all fours with the facts of this case. In the cited decision, the question was of proportionate management expenses, while in the case before us, the question is of relief or deduction allowed under the Income-tax Act under s. 80M in computation of total income. For all these reasons, we would reject on this point, assessee's grounds of appeal for all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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