1981 (2) TMI 16

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....of the Act for the assessment years 1968-69 and 1969-70, was admissible only on the income from dividend as computed under the provisions of sections 56 and 57 after deducting the appropriate interest on borrowings utilised for investment in shares in respect of which dividend income was earned by the assessee and not on the gross amount of dividend actually received by the assessee ? " The assessment years under consideration are assessment years 1967-68, 1968-69 and 1969-70. The relevant previous years are the financial years ended on 31st March, 1967, 31st March, 1968, and 31st March, 1969, respectively. The assessee is a limited company and the question is about what is known as inter-corporate dividends. The Tribunal in its order fo....

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....f the relief under s. 85A (80M) to the concerned assessee, it was gross dividend income which was to be taken into account and not the net dividend income after deducting interest, etc. As a result of the legislative amendment by way of insertion of s. 80AA, it is clear that the effect of the Gujarat decision will operate with effect from 1st April, 1968. In its decision in Cloth Traders (P.) Ltd.'s case [1979] 118 ITR 243, the Supreme Court has clearly pointed out that s. 85A and s. 80M are both in identical terms though applicable to different assessment years. Section 80AA says : " Where any deduction is required to be allowed under section 80M in respect of any income by way of dividends from a domestic company which is included in t....