https://www.taxtmi.com/caselaws?id=17543 The High Court of Karnataka ruled against the company/assessee in a case concerning the deduction of liability on account of dividend on preference shares under section 256(1) of the Income-tax Act, 1961. The court held that dividends to preference shareholders cannot be equated with interest on borrowed capital, as preference share capital is considered a contribution to the company's capital, not a borrowing subject to interest payment. Consequently, the court denied the company's deduction claim for dividends paid to preference shareholders for the assessment years 1980-81 and 1981-82. en-us Tue, 08 Jul 1997 00:00:00 +0530 Wed, 23 Sep 2009 12:03:22 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=17543 The High Court of Karnataka ruled against the company/assessee in a case concerning the deduction of liability on account of dividend on preference shares under section 256(1) of the Income-tax Act, 1961. The court held that dividends to preference shareholders cannot be equated with interest on borrowed capital, as preference share capital is considered a contribution to the company's capital, not a borrowing subject to interest payment. Consequently, the court denied the company's deduction claim for dividends paid to preference shareholders for the assessment years 1980-81 and 1981-82. Case-Laws Income Tax Tue, 08 Jul 1997 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=17543