Section 80L deduction limited to specified association categories; assessee outside the class could not claim dividend relief.

Amended section 80L(1)(c) of the Income-tax Act, 1961, as given retrospective effect from 1 April 1972 by the Taxation Laws (Amendment) Act, 1984, restricted deduction for interest on securities, dividends and similar income to a specified association of persons or body of individuals consisting of husband and wife under the community of property system in Dadra and Nagar Haveli and Goa, Daman and Diu. An assessee not falling within that narrow category was not entitled to the deduction, and the reference was answered against the assessee and in favour of the Revenue.

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Issues: Whether an assessee assessed as an association of persons was entitled to deduction under clause (c) of sub-section (1) of section 80L of the Income-tax Act, 1961 in respect of dividend income.

Analysis: Section 80L(1)(c) stood amended by the Taxation Laws (Amendment) Act, 1984 with retrospective effect from 1 April 1972. On the amended language, deduction in respect of interest on securities, dividends and similar income was restricted to the specified category of an association of persons or a body of individuals consisting of husband and wife governed by the system of community of property in the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu. The assessee did not fall within that category, and the question whether the assessee could be assessed as an association of persons was not in issue.

Conclusion: The assessee was not entitled to deduction under section 80L(1)(c); the answer to the reference was against the assessee and in favour of the Revenue.

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