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TMI Blog1973 (6) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ences made by the Income-tax Appellate Tribunal, Cochin Bench. I. T. Rs. Nos. 77 and 104 of 1971 relate to the assessments of one assessee for the assessment years 1968-69 and 1969-70. In I.T.R. No. 94 of 1971 the assessee is different and the relevant assessment year is 1968-69. These assessees are companies holding also shares in other domestic companies. These latter companies have distributed dividends to the shareholders during the accounting years relevant to the above-mentioned assessment years of the assessees. These dividends have been reckoned under the head "income from other sources" in computing the total income of the assessee-companies. Under section 80M of the Income-tax Act, a sum equal to 60% of such income by way of divid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Assistant Commissioner. He also came to the same conclusion as that arrived at by the Income-tax Officer and dismissed the appeals. The assessees filed second appeals before the Appellate Tribunal. The Appellate Tribunal disagreed with the conclusions arrived at by the subordinate authorities and directed-relief by way of rebate to be given on the basis of the total dividend for each year attributable to the profits of the company assessed to agricultural income-tax. The revenue claimed a reference to this court of the following question in I.T.R. No. 77 of 1971: " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the deduction granted in respect of dividends un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (b) where the shareholder- (i) is not a company, the amount of income-tax (but not super-tax) payable by him under this Act ; and (ii) is a company, twenty per cent. ; on that portion of the dividend which is attributable to the profits of the company assessed to agricultural income-tax ; whichever is less. " This section is re-enacted as section 235 in the present Act with a slight change in respect of the percentage of the dividend granted as relief. Under the new Act until recently the entire dividend whether attributable to the profits of the company assessed to agricultural income-tax or not was reckoned in computing the total income of the assessees. Then there was no difficulty in applying section 235 to grant the relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the dividend attributable to the profits of the company assessed to agricultural income-tax bears to its total profits assessed to agricultural income-tax, reduced by the amount of refund, if any, allowed to him by the State Government ; or (b) where the shareholder- (i) is not a company, the amount of income-tax payable by him under this Act but not exceeding income-tax calculated at the rate of twenty-seven and a half per cent. and (ii) is a company, twenty-seven and a half per cent., on that portion of the dividend which is attributable to the profits of the company assessed to agricultural income-tax whichever is less. " As per the language of the section, from the tax payable by the shareholder under the Income-tax Act the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee gets a reduction of a sum which may be more than the tax payable by it on the dividend included in the total income. It is not for the authorities under the Act or for this court to read something more into the section than what is warranted on a plain reading of it. Therefore, the assessee is entitled to relief calculated on the entire dividend attributable to the profits of the company assessed to agricultural income-tax and not merely to 40% on that portion. The view of the Appellate Tribunal is correct. Therefore, the questions referred to us are answered in the affirmative, i.e., in favour of the assessee and against the revenue. A copy of this judgment shall be forwarded to the Appellate Tribunal in each of these cases as req ..... X X X X Extracts X X X X X X X X Extracts X X X X
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