| Case ID |
df7d82b3-1fa4-4291-9a07-8df10536aaa5 |
| Body |
View case body. Login to View |
| Case Number |
|
| Decision Date |
|
| Hearing Date |
|
| Decision |
The court held that in view of the Supreme Court's decision in Distributors (Baroda) (P.) Ltd. v. Union of India, [1985] 155 ITR 120, only the net dividend, after applying deductions under sections 80L and 80M, was deductible from the total income of the assessee for the computation of chargeable profits under the Companies (Profits) Surtax Act, 1964. The Tribunal's previous ruling that allowed the entire gross dividend to be deductible was overturned. Consequently, the question posed by the Income-tax Appellate Tribunal was answered in the negative, favoring the Department and against the assessee, thus enforcing the precedent set by the Supreme Court. |
| Summary |
This case revolves around the interpretation of tax deductions applicable under sections 80L and 80M of the Income-tax Act, 1961, in relation to the computation of chargeable profits under the Companies (Profits) Surtax Act, 1964. The Allahabad High Court was tasked with deciding whether the entire gross dividend received should be included in taxable income or if only the net dividend, after applying allowable deductions, should be considered. The court ultimately upheld the Supreme Court's ruling in Distributors (Baroda) (P.) Ltd. v. Union of India, emphasizing that only net dividends are deductible. Such cases highlight the critical nuances of tax law and the importance of adhering to established judicial precedents. Tax professionals must remain abreast of these decisions as they can significantly impact tax liability calculations for corporations. Key terms relevant to this case include 'chargeable profits', 'tax deductions', 'Income-tax Act', and 'Companies Surtax Act'. |
| Court |
Allahabad High Court
|
| Entities Involved |
|
| Judges |
B.P. Jeevan Reddy, C.J.,
V.N. Mehrotra, J.
|
| Lawyers |
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
R.B. Multanimal Modi & Sons
|
| Citations |
1991 SLD 1653,
(1991) 189 ITR 730
|
| Other Citations |
Distributors (Baroda) (P.) Ltd. v. Union of India [1985] 155 ITR 120 (SC)
|
| Laws Involved |
Companies (Profits) Surtax Act, 1964,
Income-tax Act, 1961
|
| Sections |
Rule I of First Schedule,
80L,
80M
|