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TMI Blog1986 (1) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... in not granting relief under section 80K of the Income-tax Act, 1961 ('the Act') on the entire dividend of Rs. 4,49,573 received by the assessee from IMFA Ltd. The assessee is an individual. In course of assessment proceedings, he claimed relief under section 80K on the entire dividend received by him from IMFA Ltd. The assessing officer found that the new industrial undertaking had no profit during the relevant assessment year and so the relief admissible to the company had been carried forward under section 80J(3) of the Act. Relying on the decision in the case of Ahmedabad Mfg. & Calico Printing Co. Ltd. v. A. V. Joshi, ITO [1979] 118 ITR 544 (Guj.), the assessing officer did not allow any relief under section 80K on the ground that no d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India v. K.S. Subramanian AIR 1976 SC 2433 that the relief under section 80K allowable in the hands of the shareholder should be limited to the amount of relief given under section 80J to the company declaring the dividend. In this view of the matter, he rejected the claim of the assessee. 5. Another ground was taken before the Commissioner (Appeals) by the assessee, viz., that the assessing officer of the company declaring the dividend had issued a certificate under section 197(3) of the Act to the effect that the entire amount of dividend proposed to be declared by the company would be exempt in the hands of the shareholder under section 80K. In view of the above certificate given by the said officer, it was urged that the company did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ratio to the facts of this case. In this connection, he took us through the legislative history of the sections beginning from section 15C of the Indian Income-tax Act, 1922 and then proceeded to sections 80K, 84 and 85 of the 1961 Act. In this connection, he also took us through the provisions of section 80J(3) as well as circular No. 5P, dated 9-10-1967 issued by the CBDT, published in Sampat Iyenger's Law of Income-tax, Seventh edn., Vol. 3, p. 2778. According to him, a careful consideration of the provisions of law as enumerated above, would lead to the irresistible conclusion that the decision of the Gujarat High Court in the case of Ahmedabad Mfg. & Calico Printing Co. Ltd. was not correct and so should not be followed by us. He also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue raised before us is as to whether a shareholder is entitled to relief under section 80K in respect of the dividends received by him even though the company declaring the dividends could not get any deduction under section 80J because of lack of profits in the new industrial undertaking in the relevant previous year. This very issue has been considered in detail by their Lordships of the Gujarat High Court in the case of Ahmedabad Mfg. & Calico Printing Co. Ltd. Arguments similar to those taken by the assessee before us were also advanced in that case. At p. 562, it has been stated "Mr. Kaji for the petitioner said that section 80K having been interpreted by the Supreme Court in Coromandel Fertilizers' case [1976] 102 ITR 533, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 589 (Bom.), it has been held by the Bombay High Court that the Tribunal, acting anywhere in the country, has to respect the law laid down by the High Court though of a different State so long as there is no contrary decision of any other High Court on that question. Hence, we agree with the revenue authorities that the decision in the case of Ahmedabad Mfg. & Calico Printing Co. Ltd. which has considered all the decisions of the Supreme Court on the subject has to be respectfully followed. 9. Coming to the argument based on the certificate given under section 197(3), we find that the said certificate was provisionally given in order to facilitate early collection of tax and the same is not binding either on the assessee or on the departm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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