1980 (7) TMI 21 - HC - Income Tax

Summary

Issues:
1. Interpretation of provisions regarding inclusion of foreign dividends in total income under the Income-tax Act, 1961.
2. Availability of relief under section 91 of the Income-tax Act, 1961 to the assessee.

Analysis:
1. The first issue pertains to the inclusion of net foreign dividends in the total income of the assessee under the Income-tax Act, 1961. The judgment discusses the provisions of the Finance Act, 1965 of England, specifically s. 47, which outlines the taxation of dividends and distributions of a company resident in the United Kingdom. The court examines the implications of s. 47(2) which states that income under Schedule F for any assessment year shall be charged in respect of any distribution made in the year. However, the court also considers the applicability of s. 5(1)(c) of the Income-tax Act, 1961 of India, which deals with income deemed to accrue or arise abroad to a resident in India. The court's decision is influenced by a previous judgment in CIT v. Shaw Wallace & Co. Ltd., where a similar issue was addressed, leading to the conclusion that the foreign income cannot be brought to tax under the Indian Income-tax Act.

2. The second issue revolves around the availability of relief under section 91 of the Income-tax Act, 1961 to the assessee. The court refers to the decision of the Supreme Court in CIT v. Clive Insurance Co. Ltd., which supports the availability of relief under section 91. The court draws parallels between section 91 of the Income-tax Act, 1961 and section 49D of the Indian Income-tax Act, 1922. Based on the legal precedents and the interpretation of relevant provisions, the court concludes that the relief under section 91 is indeed available to the assessee.

In conclusion, the High Court of Calcutta, comprising of Justice Sabyasachi Mukherjee and Justice Sudhindra Mohan Guha, answered both questions in the affirmative and in favor of the assessee. The judgment provides a detailed analysis of the provisions of the Income-tax Act, 1961 and the Finance Act, 1965 of England, to arrive at a legal interpretation that supports the assessee's position.