TaxTMI 
TaxTMI 
1985 (8) TMI 37
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.... the assessee to the South British Group of Companies under the terms of treaty agreement dated June 8, 1965, was an admissible deduction from the assessee's income ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee is entitled to relief under section 80M of the Income-tax Act, 1961, on the gross amount of dividend received by it without any reduction of the proportionate expenses of the business ? " Question No. 2 is covered by a series of decisions of this court including that in Income-tax Reference No. 347 of 1980 intituled Calcutta Discount & Co. Ltd. v. CIT [1986] 161 ITR 301 (Cal). Following the said decisions, we answer the question in the affirmative and in fav....
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....or salvage crops charges or contributions levied on the South British in respect of reinsurance ceded under this agreement which are not recoverable from the insured. In the assessment year involved, the assessee paid Rs. 26,426 by way of reimbursement to the Group on account of United Kingdom and Dominion taxes levied on the fire, accident and miscellaneous insurance revenue of the Group in India. By mistake, the said amount was added to the income of the assessee in the latter's return of income-tax. By letter dated January 30, 1973, the assessee submitted before the Income-tax Officer that the said amount wrongly added to its income was allowable as a deduction from its total income. The Income-tax Officer, while accepting that the sa....
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....n India and it was the statutory duty of the assessee to deduct the Indian income-tax payable on the said amount. The assessee not having done so, was not entitled to claim deduction of the same. He also argued, though faintly, that the foreign tax having been levied on the taxable profit, no further deduction was allowable. Learned advocate for the Revenue cited in support of his contentions Aggarwal Chamber of Commerce Ltd. v. Ganpat Rai Hira Lal [1958] 33 ITR 245, for the proposition laid down by the Supreme Court that persons bound under the Indian Income-tax Act, 1922, to make deduction of income-tax at the time of making payment of any income, profits or gains, are not concerned with the ultimate result of the assessment of the per....
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....yable. It was further held that the payment was made by the assessee under a statutory obligation and the same would not constitute expenditure for the purpose of the assessee's business, as the assessee was in default. In Jaipuria Samla Amalgamated Collieries Ltd. v. CIT [1971] 82 ITR 580 (SC), the assessee in its business of raising and selling coal paid Road and Public Works Cess and Education Cess under two Cess Acts. The cess was levied on the annual net profits of the assessee which had to be calculated in a particular manner. The question arose whether the cess had been levied on the assessee on profits within the meaning of section 10(4) of the Indian Income-tax Act, 1922. It was held by the Supreme Court that in the context, ....