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TMI Blog1979 (2) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings the assessee-company claimed exemption from super-tax in respect of dividends received from the said Suhrid Geigy Ltd. (hereinafter referred to as the " Indian company "). These shares were purchased by the assessee some time in April, 1962, when the Indian company raised fresh capital and issued fresh shares. The claim of the assessee for exemption under s. 99(1)(iv) of the I.T. Act, 1961, as it stood at the material time, was rejected by the ITO on the ground that the condition in r. 2 of the Fifth Schedule in respect of fresh capital by public subscription has not been satisfied by the Indian company from which the assessee got the dividends. He further held that the fresh capital of the Indian company did not come by publ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as patently contrary to the requirements contemplated by the rules. Clause (iv) of s. 99(1) at the material time read as follows : " Super-tax shall not be payable by an assessee in respect of the following amounts which are included in his total income--... (iv) if the assessee is a company, any dividend received by it from an Indian company subject to the provisions contained in the Fifth Schedule. " Rules 1 and 2 of the Fifth Schedule as they were at the material time read as follows : " 1. Super-tax shall not be payable by a company in respect of any dividend which is assessable for the assessment year commencing on the 1st day of April, 1962, and for the subsequent assessment years, and which is declared-- (a) by an Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f, or starting a separate unit for the manufacture or production of, any one or more of the articles specified in any of the items in Part A of this Schedule; and (b) after the 31st day of March, 1961, and before the 1st day of April, 1967, for the purpose of increasing the production of, or starting a separate unit for the manufacture or production of, any one or more of the articles specified in any of the items in Part B of this Schedule. " The scheme of the Rules reproduced above is extremely simple. Rule 1 provides that super-tax shall not be payable by a company in respect of dividend from a certain category of Indian companies which is assessable for the assessment year commencing on 1st day of April, 1962, and for the subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain articles is necessary, but the articles for the purposes of cl. (b) are those specified in Part B of the Schedule. The condition with regard to the applicability of s. 84 is also to be satisfied. Rule 2 specifically refers to dividend payable, in respect of any fresh capital raised by an Indian company by public subscription. In respect of a company engaged in the manufacture or production of items specified in Part A of the Schedule, fresh capital should be raised after 28th February, 1953, and before 1st April, 1967, and in respect of a company engaged in the manufacture or production of articles specified in Part B of the Schedule, fresh capital must be raised after 31st March, 1961, and before 1st April, 1967. No doubt, rr. 1 an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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