TaxTMI 
TaxTMI 
TaxTMI 
1993 (7) TMI 341
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.... mso-bidi-font-size:10.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} AJIT K. SENGUPTA AND SHYAMAL KUMAR SEN, JJ. JUDGEMENT Sen, J. - Pursuant to the direction under section 256(2) of the Income-tax Act, 1961 ('the Act') the following questions were referred by the Tribunal: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in upholding the order of the Commissioner of Income-tax (Appeals) that though the income from dividends has to be assessed under a separate head,....
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....books of account the estimate of such expenditure at 5 per cent of the gross dividend of the two years was proper. He accordingly deducted a sum of ₹ 2,51,550 and ₹ 3,10,700 for the two assessment years respectively from the gross dividends and allowed the relief under section 80M on the net dividend. 3. Being aggrieved, the assessee-company came up in appeal before the Commissioner (Appeals). The assessee-company challenged the ITO's action and argued that the dividend income, though assessable under the head 'Income from other sources' arises out of its business actively and no apportionment of the expenses between the business income and income from other sources should be made. Two decisions of this Court were c....
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....der the following heads of income- A.Salaries. B.Interest on securities. C.Income from house property. D.Profits & gains of business or profession. E.Capital gains. F.Income from other sources." 7. He has also referred to the judgment and decision in the case of United Commercial Bank Ltd v. CIT [1957] 32 ITR 688 (SC). He has further submitted that in the aforesaid decision it has been held that specific heads of section are mutually exclusive and when one item of income falls under one head it is to be charged under that head and no other. United Commercial Bank is a banking company. Referring to the said decision, Mr. Maitra submitted that though the whole activity is that of business income which is chargeable specifically un....
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.... ITR 688 (SC) that business income is broken up under different heads only for the purpose of computation of the total income; by that break-up the income does not cease to be the income of the business, the different heads of income being only the classification prescribed by the Indian Income-tax Act for computation of income...." 9. The learned Advocate for the revenue submitted that it may be for the purposes of setting off loss, dividend income is to be treated as business income. But that does not lead to the conclusion that dividend income is not to be assessed under section 56 and deductions are not to be allowed for the purpose of earning dividend. In this connection, he has also relied upon the decision in the case of CIT v.....
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....he decision of the Tribunal which in our view was correct in upholding the order of the Commissioner (Appeals). 11. Accordingly, all the questions are answered in the affirmative and in favour of the assessee and against the revenue. 12. There will be no order as to costs. Sengupta, J. - I have gone through the judgment of my learned brother Shyamal Kumar Sen, J. I fully agree with the reasoning and the ultimate conclusion. It is, however, necessary to draw out the controversy into focus which the learned counsel for the revenue sought to urge before us. The learned counsel strenuously argued that the Supreme Court in United Commercial Bank Ltd's case (supra) has held that where the business is that of investment or includes investme....