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TMI Blog1981 (1) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... aid clause should be computed with reference to the proposed dividend of Rs. 24,000 and not with reference to the dividend of Rs. 60,000 relating to the profits of the assessment year 1964-65 though declared and distributed during the previous year for the assessment year 1965-66 ?" The assessee is a private limited company engaged in the manufacture of plastic goods. The provisions of s. 104 of the I.T. Act apply in the case of the assessee. There is also no dispute that according to sub-cl. (B) of cl. (c) of the second proviso to Paragraph F of the Finance Act, 1965, its rebate from tax, was liable to reduction @ 7.5% on the whole amount of its dividends other than dividends on preference shares. It will be relevant to set out the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount of the company after the at the rate of 31st day of March, 1964; 12.5 per cent. and (c) in addition, in the case of (i) a company as is referred to in section 108 of the Income-tax Act, or (ii) a company as is referred to in clause (iii) of sub-section (2) or sub-section (4) of section 104 of the said Act, or (iii) such a company as is exempt from the operation of section 104 of the said Act by a notification issued under the provisions of sub-section (3) of that section, which has declared or distributed to its shareholders during the previous year any dividends other than dividends on preference shares- (A) in the case of a company which since the date of the commencement of its activities has declared or distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the provisions of the Finance Act were very clear on this point and there was no ambiguity in the same. He, therefore, confirmed the order of the ITO on this aspect. The assessee went up in further appeal before the Tribunal. The same contention was urged before the Tribunal on behalf of the assessee. The Tribunal found on a perusal of the assessee's profit and loss appropriation account that the assessee earned a net profit of Rs. 69,456 during the year under reference, which together with the carried forward credit balance as per last account amounting to Rs. 12,648, gave a total of Rs. 82,105. Out of this the following provisions were made: (i) Provision for taxation Rs. 40,000 (ii) Proposed dividend Rs. 24,000 (iii) Balanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anguage used by the Legislature. Perhaps, the Tribunal thought that as the reduction of the rebate granted to the taxes related to the profits of the year, the reduction should be calculated on the basis of the dividend declared out of the income of the current year, for the year under assessment. But, in fiscal statutes, as is well known, one should be guided by the language used; there is no scope for equity or intent. It is true that from one point of view it might be unfair to reduce the rebate granted to tax relief, if such dividends are declared out of the profits of the previous year. On the other hand, if this construction that has appealed to the Tribunal is applied then the assessee can go on postponing the declaration of the divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n March, 1955, the assessee-company declared a dividend of Rs. 68,750. An additional dividend of Rs. 3 lakhs was also declared in compliance with the direction of the ITO under s. 23A and relating to the years 1949-50 and 1950-51. The ITO proposed to withdraw the rebate on super-tax on the sum of Rs. 68,750 under Part II-D(b) of Sch. I of the Finance Act, 1956. The assessee contended that the withdrawal of rebate could not be made as the dividends related to the years 1949-50 and 1950-51, and, alternatively, that as the declaration of the dividend had been made pursuant to the direction of the ITO, under s. 23A, as it stood then, it must be deemed to be in respect of the years 1949-50 and 1950-51. It was held that though the dividends relat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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