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TMI Blog1984 (11) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... d to us, questions Nos. 1 to 4 are at the instance of the Department and questions Nos. 5 to 7 are at the instance of the assessee. The questions are as follows : " 1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the annual premium paid by the assessee-company on the accident insurance of its directors was not their perquisite within the meaning of the term used in section 17(1) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the assessee was entitled to deduction under section 35(1)(iii) of the Income-tax Act, 1961, on account of rent paid by it on behalf of M/s. Shri Ram Centre for Industrial Relations in the accounting years relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law allocable to the income earned by way of dividend ? 7. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the rebate admissible under section 85A of the Income-tax Act, 1961, for the assessment year 1967-68, was to be computed on the basis of the net amount of dividend arrived at by deducting from the inter-corporate dividend received by the assessee-company from other domestic companies, the interest relatable to such dividend income, but deducting neither the dividend exempt from tax nor the dividend ascribable to agricultural income ? It would be convenient to deal with these questions one by one. The first question relates to the insurance premium paid by the assessee-company i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is not to the institution. We find little difference between the payment made directly to the institution or indirectly to a creditor of the institution. In each case, the payment results in credit to the institution concerned. However, learned counsel submits that the payment is for rent and not for research. We do not find any force in this contention. An institution being concerned in research has also to have a building and has to incur expenditure in retaining that building. So, any payments made towards the rent would be payments towards the research. In any event, to the extent that the rent has been paid, additional funds would be available to the institution for carrying on research. So, from whatever angle it is looked at, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no error in the conclusion of the Tribunal and we accordingly answer question No. 3 referred to us in the affirmative on the ground that the company was an " industrial company " even if the said 51 per cent. or more of the income came from a manufacture in partnership. Whether that income came from a partnership or not makes no difference. Question No. 4 is concerned with the application of section 80E and section 80-1 to the profits derived from the firm, M/s. Electrical Industries Corporation. We have been shown the unreported judgment of the assessee's own case for the assessment year 1965-66, which is Income-tax References Nos. 268 to 270 of 1975 and Surtax Nos. 115 and 116 of 1974. In that case also, it was held that relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable for profits and gains attributable to priority industries. Section 80B defined " priority industry " as business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the list in the Fifth Schedule. So, section 80-I was the same as section 80E. Later on, by the Finance Act of 1968, there was a subsequent change with which we are not concerned. The position, therefore, in 1968-69 was the same as in 1967-68. Accordingly, following the aforementioned judgment, we come to the conclusion that this question has to be answered in the affirmative, in favour of the assessee and against the Department. It is now necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 6 is a corollary to question No. 5 and this seems to be question of fact dependent on the amount of interest actually paid by the assessee in respect of the borrowed capital in accordance with the terms of section 80AA. As the point is one covered by the provisions of section 80AA, the Tribunal has merely to give effect to that provision for the assessment years 1968-69 to 1970-71. It is now necessary to refer to question No. 7. This question is extremely badly worded and counsel for the assessee was even ready to say that he did not press this question. However, the discussion in the statement of case seems to show that this is a composite question covering the submission of the Commissioner of Income-tax that exempted dividend a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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