9911796707
|
Home
Issues:
1. Interpretation of development allowance reserve inclusion in capital computation. 2. Exclusion of entire dividend income from income assessed under rule 1 (viii) of the First Schedule. Analysis: The judgment pertains to surtax assessment orders for the years 1977-78 and 1978-79 where the Revenue, the petitioner, contested the inclusion of the entire development allowance reserve and the exclusion of only 40% of the dividend income by the Income-tax Officer. The Commissioner of Income-tax (Appeals) and the Appellate Tribunal held that the entire development allowance reserve and the entire dividend income should be included and excluded, respectively, based on previous decisions. The Revenue sought to refer questions of law to the court regarding these issues. The court noted that the Appellate Tribunal did not provide a clear finding on the development allowance reserve issue, merely referencing a previous case. The court found this to be a referable question of law. Additionally, the court highlighted the impact of section 80AA and a Supreme Court decision on the exclusion of dividend income, deeming it a legal question as well. Consequently, the court directed the Income-tax Appellate Tribunal to refer both questions for decision within three months. In analyzing the first issue, the court observed that the Appellate Tribunal did not offer a specific finding on the development allowance reserve inclusion in capital computation, merely citing a previous case. The court found this lack of a definite finding as a basis for considering it a referable question of law. The court emphasized the need for a clear determination on whether any part of the development allowance reserve had been allowed as a deduction in previous years and if any abatement was required. This lack of clarity led the court to direct the Appellate Tribunal to refer the question for decision. Regarding the second issue, the court delved into the impact of section 80AA, introduced in the Income-tax Act with retrospective effect from April 1, 1968, and a Supreme Court decision on the exclusion of dividend income. The court highlighted the need to consider these legal aspects in determining whether the entire dividend income should be excluded from the income assessed under rule 1 (viii) of the First Schedule. Given the legal complexities and implications of these provisions, the court deemed it necessary to refer this question of law to the Appellate Tribunal for further examination and decision. In conclusion, the court allowed the original petitions, directing the Income-tax Appellate Tribunal to refer the legal questions raised by the Revenue regarding the development allowance reserve inclusion in capital computation and the exclusion of dividend income for decision within three months. The judgment underscores the importance of clear findings and legal considerations in tax assessment matters, ensuring proper interpretation and application of relevant provisions.
|
