1992 (4) TMI 67 - AT - Income Tax

Summary

Issues: Appeal by department and cross objection by assessee regarding the inclusion of net dividend instead of gross dividend in the total income of the assessee from a foreign company for the assessment year 1983-84.

The judgment addresses the appeal by the department and cross objection by the assessee concerning the inclusion of net dividend instead of gross dividend in the total income of the assessee from a foreign company for the assessment year 1983-84. The Revenue contended that the Assessing Officer should consider the gross dividend received by the assessee from a foreign company for calculating the total income. The assessee argued that the issue is in their favor based on a Tribunal's order and a decision of the Calcutta High Court. The departmental representative disagreed, citing an unreported decision in another case. The argument revolved around the interpretation of section 5(1)(c) of the Income-tax Act, 1961, which includes all income accruing to a resident of India from outside India. The discussion highlighted the change brought about by the English Finance Act, 1965, which amended the treatment of dividend income from foreign companies to be the gross dividend instead of the net dividend. The High Court of Calcutta's decision in a similar case was analyzed, emphasizing the distinction between net and gross dividend and the relevance of the assessment year. Ultimately, the Tribunal found in favor of the Revenue, stating that the total income should encompass the gross amount received by a resident from a foreign company. Consequently, the appeal by the department was allowed.