9911796707
TMI Blog1991 (7) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation Act for the purpose of making medium and long-term credits easily available to industrial concerns of India, particularly in circumstances where normal banking facility is inadequate and recourse to method of capital issue is impracticable. The main source of the assessee's income is interest on loans granted to industrial concerns in India. It also earns dividend, commission, interest and commitment charges on unutilised loans. For the years in question, the assessee claimed before the Income-tax Officer relief under section 80M of its inter-corporate dividend income and also reliefs under sections 80L and 80K of the Income-tax Act, 1961. The Income-tax Officer allowed relief under section 80M only with reference to the net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case, the Tribunal was correct in holding that the relief under section 80M should be worked out in relation to the gross amount of intercorporate dividend income of the assessee and not with reference to the net amount of such dividend income, i.e., after deduction of the expenses relatable thereto under section 57 of the Act of 1961, for the assessment years 1970-71 and 1972-73 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the relief under section 80M should be worked out in relation to the gross amount of intercorporate dividend and similarly relief under sections 80K and 80L also worked out in relation to the gross amounts of dividend, and not the net ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction under sections 80K and 80L as the language of the two provisions was materially different. He further submits that the Madras High Court in CIT v. Mad)-as Motor and General Insurance Co. Ltd. [1986] 159 ITR 601 has come to the conclusion that the aforesaid Supreme Court decision in Distributors (Baroda) P. Ltd.'s case [1985] 155 ITR 120 was not applicable and, on correct interpretation of section 80K, the assessee was entitled to the benefit under that section on the gross dividend income without deducting the proportionate management expenses. Mr. Vaish reiterates the arguments of the assessee which found favour with the Madras High Court. The difficulty in the way of the assessee is that the Supreme Court has, in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 80K, deduction on gross amount received cannot be allowed and for the same reason, under section 80L as well, deduction on the gross amount cannot be allowed. The result of this is that, in view of the decisions of the Supreme Court in Distributors (Baroda) P. Ltd.'s case [1985] 155 ITR 120 and P. K. Jhaveri's case [1990] 181 ITR 79, the questions of law are answered in the negative and in favour of the Revenue. It is contended by Mr. Vaish that the Income-tax Appellate Tribunal, while disposing of the appeals, had allowed deduction on the gross amount of dividend. In view of the decision now given, the Income-tax Appellate Tribunal will have to determine the deduction allowable under sections 80M, 80L and 80K because gross dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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