9911796707
TMI Blog2006 (11) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, 1961, has been preferred by the appellant M/s. Williamson Financial Services Limited (hereinafter referred to as "the appellant"). 3 Facts : The appellant filed its return of income for the assessment year 1991-92 showing an income of Rs. 41,82,030 ; thereafter the return was duly processed by the respondents and notices were issued under sections 143(2) and 142(1) of the Act and after hearing the assessee, the assessment order was passed determining the total income of the appellant-company at Rs. 1,16,55,470 holding, inter alia, that the deduction under section 80HHC to be computed after apportionment under rule 8(1) and not from the composite income; that the assessee is not entitled to deduction on the total divide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether, on the facts and in the circumstances of the case, the deduction under section 80M is not to be allowed from the gross dividend? 4. Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in confirming the disallowances of Rs. 11,50,000 and Rs. 7,50,000 on account of interest and commitment charges respectively made under the head 'Business income' ? 5. Whether, on the facts and in the circumstances of the case, the learned Tribunal was justified in upholding the order of the Assessing Officer by applying the same net profit rate on the sale of tea manufactured out of own grown green leaf and the sale of tea manufactured out of the green leaf purchased from outside for the purpose of apport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sts." 7 In view of the above, questions Nos. 1, 2 and 3 stands answered accordingly and the decision in Bazaloni Group Ltd. [2005] 272 ITR 11 (Gauhati), shall apply in the present case. 8 Coming to questions Nos. 4 and 5, learned counsel for the appellant is fair enough to submit that the decision of the Constitution Bench of the apex court in Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120, is against him, where the apex court has observed (page 134) : "We may, therefore, first examine the language of section 80M for arriving at its true interpretation. But before we do so, let us consider what is the object behind grant of relief under section 80M. It was common ground between the parties that the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount which is liable to suffer tax once again in the hands of the assessee. The Legislature could certainly be attributed with the intention to prevent double taxation but not to provide an additional benefit which would go beyond what is required for saving the amount of dividend from taxation once again in the hands of the assessee. Bearing in mind these prefatory observations in regard to the legislative object, we may now proceed to construe the language of section 80M. Section 80M, sub-section (1), opens with the words 'where the gross total income of an assessee . . . . includes any income by way of dividends from a domestic company' and proceeds to say that in such a case, there shall be allowed in computing the total income of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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