Rebate on the dividend recieved from company to company. - Income Tax - 234/CBDT

INSTRUCTION NO. 234/CBDT Dated: October 24, 1970 Section(s) Referred: 80M Statute: Income - Tax Act, 1961 In para 1.280 of their 117th Report (1969-70) to the 4th Lok Sabha, the PAC have recommended as under:- "1.280: The Committee observe that under the I.T.Act, dividend income received by a Company from another company is entitled to rebate. The rebate is to be calculated with reference to the net dividend income, after deducting the expenses incurred in earning the dividend income. In the case under report, however, the rebate was calculated with reference to the gross amount of inter-corporate dividend without deducting the expenditure incurred in earning it. This resulted in excess rebate of Rs.59,825/- being granted. The Committee feel that, with a little care on the part of the assessing officer, the mistake could have been avoided. The Committee also note that though the case belonged to a company Circle, it had not been checked in Internal Audit. The Committee trust that the Board will ensure that such omissions do not recur." 2. The Board desire that the ITO's should note the correct mode of giving rebate on inter-corporate dividend and the Internal Audit Parties should report any instances of deviation noticed by them.