2009 (4) TMI 948 - HC - Income Tax

Summary

Issues involved:
1. Taxation of dividend income on a net basis
2. Allowance of expenditure on distribution of refreshment coupons to employees
3. Treatment of amount received on termination of re-insurance division as capital receipt

Taxation of dividend income on a net basis:
The appellant, Revenue, raised the issue of whether the Income Tax Appellate Tribunal (ITAT) was correct in directing the Assessing Officer (A.O.) to tax the dividend income on a net basis. The counsel for the assessee referred to a previous court decision to argue that this question was not a substantial question of law, and therefore, the appeal was dismissed.

Allowance of expenditure on distribution of refreshment coupons to employees:
The appellant questioned the ITAT's decision to allow expenditure on the distribution of refreshment coupons to employees, despite it not being incurred for business purposes. The counsel for the assessee highlighted that the Tribunal had relied on its earlier order in a similar case, which had been accepted by the Revenue. Consequently, this question was also deemed not to be a substantial question of law.

Treatment of amount received on termination of re-insurance division as capital receipt:
The issue of whether the amount received on the termination of the re-insurance division of the assessee company should be treated as a capital receipt was raised. The court noted that this issue was already covered by a previous judgment, and therefore, no substantial question of law was involved in this appeal. As a result, the appeal was dismissed with no order as to costs.