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Commissioner of Income-tax Bombay City-iii, Bombay Vs. B.M. Crover - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMumbai High Court
Decided On
Case NumberIncome-tax Application No. 97 of 1975
Judge
Reported in[1978]115ITR885(Bom)
ActsIncome Tax Act, 1961 - Sections 57, 80A(1), 80B(5), 80C, 80K, 80L and 85A
AppellantCommissioner of Income-tax Bombay City-iii, Bombay
RespondentB.M. Crover
Excerpt:
direct taxation - deduction - sections 57, 80a (1), 80 (5), 80c, 80k, 80l, 85a and 280 (6) of income tax act, 1961 - section 80a (1) as well as in section 80b (5) deduction contemplated under section 57 (iii) not been mentioned - section 80a (1) refers only to deductions specified under section 80c to 80u - whereas section 80b (5) excludes only deduction under section 280 (6). - - 80a(1) as well as in s......the deduction as would be available to the assessee under s. 57(iii), there would be no dividend income component of the gross total income of the assessee from which the assessee would be entitled to have further deductions under these who sections, viz., ss. 80k and 80l. it is important, however, in this connection to note that both in s. 80a(1) as well as in s. 80b(5), the deduction contemplated under s. 57(iii) has not been mentioned. the former provision refers only to deductions specified in ss. 80c to 80u, whereas s. 80b(5) excludes only the deduction under chap. vi-a or under s. 280(6) and does not mention the deduction available to the assessee under s. 57(iii) of the act. 4. we are fortified in our view by a decision of this court in cit v. new great insurance co......
Judgment:

Deai, J.

1. In our opinion, the rule must stand discharged.

2. Mr. Joshi has submitted that an arguable question of law arises inasmuch as the point has been decided in favour of the department by the judgment of the Gujarat High Court in Addl. CIT v. Cloth Traders (p.) Ltd. : [1974]97ITR140(Guj) . It is, however, to be appreciated that the Division Bench of the Gujarat High Court in that decision was dealing with s. 85A (as it them stood) of the I.T. Act, 1961, the language of which materially differs from the two sections which we are considering, viz., ss. 80K and 80L, of the said Act. As the observations of the Gujarat High Court indicate, considerable reliance has been placed on the second part of s. 85A which contemplated the rate of tax which is chargeable on total income. Such wording is not to be found in the two sections under our consideration (ss. 80K and 80L) which allow for a straight deduction.

3. In our view the language of the two sections which were considered by the Tribunal and which arise for our consideration in this application, viz., ss. 80K and 80L, is quite clear and the answer to the question must be regarded as self-evident. It was submitted by Mr. Joshi that in the instant case after considering the deduction as would be available to the assessee under s. 57(iii), there would be no dividend income component of the gross total income of the assessee from which the assessee would be entitled to have further deductions under these who sections, viz., ss. 80K and 80L. It is important, however, in this connection to note that both in s. 80A(1) as well as in s. 80B(5), the deduction contemplated under s. 57(iii) has not been mentioned. The former provision refers only to deductions specified in ss. 80C to 80U, whereas s. 80B(5) excludes only the deduction under Chap. VI-A or under s. 280(6) and does not mention the deduction available to the assessee under s. 57(iii) of the Act.

4. We are fortified in our view by a decision of this court in CIT v. New Great Insurance Co. Ltd. : [1973]90ITR348(Bom) as also of the Calcutta High Court in CIT v. Darbhanga Marketing Co. Ltd. : [1971]80ITR72(Cal) . In the latter case the department had desired to deduct from the dividend income, in respect of which deduction was claimed, an amount of Rs. 21,326, which was said to be the interest paid to various parties on moneys borrowed in connection with investment in shares. The contention of the department in the Bombay case : [1973]90ITR348(Bom) was that proportionate management expenses which were attributable as dividend income had to be deducted from the dividend income before granting to the assessee the deduction claimed in respect thereof. The department's contentions in both the cases were rejected by the High Court concerned.

5. Lastly, it may by mentioned that the submission as was formulated in this court by Mr. Joshi is not reflected in the question which is sought to be referred to us.

6. In the result, the rule will stand discharged with costs.


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