1992 (1) TMI 10

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..... allowing relief under section 80M by passing the rectification order under section 154 of the Income-tax Act, 1961 ? ". Shortly stated, the facts are that the assessee is a limited company deriving income from business in money-lending, interest on securities and dividend. The Income-tax Officer had completed the original assessments allowing reliefs under section 80M of the Act on the gross amounts of dividend following the decision of the Supreme Court in the case of Cloth Traders (P.) Ltd. v. Addl. CIT [1979] 118 ITR 243. Subsequently, the Income-tax Officer passed orders under section 154 on October 25, 1983, reducing the reliefs given in the original assessments. The Income-tax Officer calculated the proportionate expenses relatable .....

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..... ding that the Commissioner of Income-tax (Appeals) erred in his decision. The Tribunal found that in the case of this very assessee a similar point has been decided in favour of the assessee. That decision, in turn, was based on an earlier decision of the Tribunal dated January 1, 1986. In all these cases, the Tribunal had arrived at the conclusion that the amount of expenses relatable to the earning of dividend cannot be calculated for the first time in a rectification order as it was a matter open to debate and challenge. Following the aforesaid orders, the Tribunal upheld the order of the Commissioner of Income-tax (Appeals) and dismissed the Departmental appeal. At the hearing, none appeared for the assessee ; we asked Mr. R. N. Dutt, .....

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..... allocable for earning the dividend. The dispute was, therefore, whether in the rectification proceedings, such allocation of expenditure between business income and income from other sources can be made. In our view, such a dispute cannot be the subject-matter of rectification proceedings under section 154, if the Income-tax Officer would have rightly or wrongly allocated a part of the expenditure towards earning of the dividend income but none the less allowed relief on the gross dividend. In that event, the contention raised by the Revenue would have substance. Having regard to the facts and circumstances of this case, we are of the view that the Tribunal came to the correct conclusion on the facts. We, therefore answer this question in .....

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