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TMI Blog1981 (4) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... see's total income was Rs. 8,66,886 which consisted of interest from loans to the tune of Rs. 2,02,886 and dividend of Rs.6,64,000. The super-tax payable on the dividend at the rate of 5% was Rs 33,200 and that payable on the interest at the rate of 38% was Rs. 77,097. The total super-tax thus worked out to Rs. 1,10,297, which was 12.72% of the total income of Rs. 8,66,886. In the total income from dividend, namely, Rs. 6,64,000, a sum of Rs. 3,22,172 was the dividend earned which was entitled to relief under s. 101(2) of the said Act. There is no dispute about this fact. The ITO gave a rebate of only 5% on the said sum of Rs. 3,22,172, since, according to him, that was the rate of super-tax on the dividend income earned by the assessee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961, at the rate of 12.72% for 1962-63 and 20.14% for the year 1963-64, or only at the flat rate of 5% for both the years ? " Before us Mr. Joshi, the learned counsel appearing for the Revenue, made the same submission as was made on behalf of the Revenue before the lower authority, namely, that the deduction or rebate which was permissible under the said s. 101(2) was of an amount equal to super-tax calculated at the average rate of super-tax on the dividend earned by the assessee from the industrial undertaking concerned and not an amount equal to the super-tax calculated at the average rate of super-tax on the total income of the assessee. In order to appreciate the said argument it is necessary to reproduce the provisions of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the shareholding of such newly established undertaking. There is no dispute about these two propositions. However, what is disputed is the rate at which such amount is to be calculated. While it is the case of the assessee that the rate to be calculated is on the basis of the average rate of super-tax payable on the total income, the case of the Revenue is that such rate is the average rate of super-tax payable on the dividend earned from such undertaking. According to us, the Revenue is not entitled to succeed on the submission before us because plain reading of sub-s. (2) makes it more than clear that the rate intended by the Legislature is the average rate of super-tax and it is not qualified by the words " average rate of supe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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