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Commissioner of Income-tax, West Bengal Vs. Jardine Henderson Ltd. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtSupreme Court of India
Decided On
Case NumberCivil Appeal No. 512 of 1978
Judge
Reported inAIR1979SC1710; [1979]117ITR568(SC); (1980)3SCC67
AppellantCommissioner of Income-tax, West Bengal
RespondentJardine Henderson Ltd.
Excerpt:
.....to show that they were parties to clause relating to arbitration contained in partnership deed in question held, section 8 would not be applicable to any dispute concerning said partnership deed. therefore matter cannot be referred to arbitration. section 8(1): reference to arbitration suit for declaration that reconstituted partnership deed was void and illegal and for rendition of accounts and share of profits neither plaintiffs nor their father r from whom they derive title were parties to said deed held, in order to get reliefs it is absolutely essential for plaintiffs, for, such declaration could only be granted by civil court and not by arbitrator. matter could not therefore be referred to arbitration. section 8(2): reference to arbitration held, failure of applicant..........made by the commissioner for reference of a question of law said to arise out of the order of the tribunal. the question is whether deduction under section 80m of the income-tax act, 1961 is allowable on gross dividend or it is allowable only on net dividend arrived at after deducting the interest payable on moneys borrowed for the purpose of earning such dividend. this is undoubtedly a question of law, but we find that it is wholly academic to refer it, because it has been found by the tribunal as a fact and which finding has become final, that no part of the borrowings was made for the purpose of earning, dividend and hence there was no question of deduction of any interest for the purpose of arriving at the net income by way of dividend. the question sought to be referred by the.....
Judgment:
ORDER

1. This appeal by special leave is directed against an order passed by the High Court of Calcutta refusing an application made by the Commissioner for reference of a question of law said to arise out of the order of the Tribunal. The question is whether deduction under Section 80M of the Income-tax Act, 1961 is allowable on gross dividend or it is allowable only on net dividend arrived at after deducting the interest payable on moneys borrowed for the purpose of earning such dividend. This is undoubtedly a question of law, but we find that it is wholly academic to refer it, because it has been found by the Tribunal as a fact and which finding has become final, that no part of the borrowings was made for the purpose of earning, dividend and hence there was no question of deduction of any interest for the purpose of arriving at the net income by way of dividend. The question sought to be referred by the Commissioner does not, therefore, arise for consideration on this finding of fact reached by the Tribunal and it is wholly unnecessary to call for a reference as contended by the Commissioner.

2. We accordingly dismiss the appeal with costs.


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