Gross dividend deduction under section 80M allowed without reducing related expenses or interest.

Section 80M relief was held allowable on gross dividend income received from domestic companies, without first deducting related expenses or interest. The court applied its earlier binding interpretations of "gross total income" and treated them as directly governing the same statutory question, rejecting the department's attempt to read section 80M strictly with section 80B(5). The operative effect was that the assessee remained entitled to deduction on the full dividend income, and the departmental objection failed.

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Issues: Whether the assessee-company was entitled to deduction under section 80M of the Income-tax Act, 1961, on the gross dividend income without deducting related expenses and interest in computing the relief.

Analysis: The assessment year was 1968-69 and the assessee received dividends from domestic companies. The Court held that the expression "gross total income" in section 80M had already been construed by earlier binding decisions of the same court to allow the deduction on the gross income, without first reducing expenses connected with earning such income. The departmental attempt to read the expression strictly with section 80B(5) was not accepted, as the earlier rulings were treated as directly applicable to the same interpretative question.

Conclusion: The assessee was entitled to deduction under section 80M on the gross dividend income, without deduction of expenses and interest. The question was answered in favour of the assessee and against the department.

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