High Court remits assessment of foreign company dividends & deduction issue back to Tribunal for fair determination.

The High Court remitted the issues of assessing dividend from foreign companies and the deduction of amounts due from Chingrihata Bone Mills (P.) Ltd. back to the Tribunal for a decision in accordance with the law. The Court directed both parties to present evidence before the Tribunal for a fair determination, emphasizing a thorough examination of the facts. Each party was ordered to bear their own costs in the case.

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Issues:
1. Assessment of dividend from foreign companies.
2. Deduction of amount due from Chingrihata Bone Mills (P.) Ltd. and interest thereon.

Analysis:

Assessment of Dividend from Foreign Companies:
The case involved the assessment year 1964-65, where the assessee contended that dividend from foreign companies should be assessed on the net amount after tax deduction in the foreign country. The Income Tax Officer (ITO) did not accept this claim. On appeal, the Appellate Tribunal held that only the net dividends from foreign companies should be assessed to tax, following its decision for the preceding assessment year. The High Court, in line with a previous decision, upheld the Tribunal's decision, ruling in favor of the assessee regarding the assessment of foreign dividends.

Deduction of Amount Due from Chingrihata Bone Mills (P.) Ltd. and Interest:
The second issue involved the deduction of Rs. 2,53,484 due from Chingrihata Bone Mills (P.) Ltd. and interest of Rs. 49,132 written off by the assessee. The Appellate Tribunal denied this deduction, stating that these amounts could not be allowed in computing the business income. The assessee argued that the loan advanced to Chingrihata Bone Mills (P.) Ltd. was in the course of its trading operations, emphasizing the need for regular supplies from the company. The High Court noted that this aspect was not adequately argued before the Tribunal and remanded the case for further examination. Both parties were directed to present evidence before the Tribunal for a fresh consideration.

In conclusion, the High Court remitted both issues back to the Tribunal for a decision in accordance with the law after hearing the parties. The Court emphasized the need for a thorough examination of the facts and directed that both the assessee and the Revenue be allowed to present evidence before the Tribunal for a fair determination. Each party was ordered to bear their own costs in the case.

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