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TMI Blog1979 (5) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... r. 1973-74. 2. The assessee is a company and as such liable to Companies(Profits)Surtax Act, 1964. The ITO computed the total income of the assessee for this year at Rs. 22,18,170 while acting as Surtax Officer, for the same year. He was required by the assessee to exclude from this total income the sum of Rs. 3,52,303 which it had received as income by way of dividends from an Indian Company or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AAC has erred in allowing a relief of Rs. 2,81,782. 3. The Surtax Officer had also, while computing the capital of the Company, for the purpose of standard deduction, reduced proportionate capital under r. 4 of the Second Schedule to the Companies(Profits)Surtax Act,1964. This was challenged in appeal before the AAC, who, following the ratio of the Karnataka High Court judgement in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any income referred to in Cl.(viii) of r. 1 included in the total income to be reduced. This underscores the intention of the legislature that only that dividend income which was included in the total income had to be excluded and not the gross amount of dividend while working out the chargeable profits. This was opposed by the assessee on the plea that cl. (viii) talks of income by way of divid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions and insofar as the contention of the Revenue regarding the first ground is concerned, we think it makes no change because we have held in the case of M/s Patiala Flour Mills Co.(P)Ltd. Patiala in STA Nos. 2 & 3 of 1976-77 decided on 30th Sept., 1978 that income by way of dividend refers to gross dividend income and not the net amount. This is now further supported by the decision of the Ker ..... X X X X Extracts X X X X X X X X Extracts X X X X
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