1980 (7) TMI 21

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....2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the relief under section 91 of the Income-tax Act, 1961, was available to the assessee ? " So far as the second question is concerned, in view of the decision of the Supreme Court in the case of CIT v. Clive Insurance Co. Ltd. [1978] 113 ITR 636, this question must be answered in the affirmative and in favour of the assessee. It must be remembered that s. 91 of the I.T. Act 1961, is similar to s. 49D of the Indian I.T. Act, 1922. So far as the first question is concerned, the assessment year involved is 1970-71. Therefore, it was sought to be urged that in view of s. 47 of the Finance Act, 1965, of England which is again more or less ....

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.... amount equal to that sum, on which income tax has been borne by deduction : Provided that in the case of preference dividends the tax chargeable and the amount of income represented by the dividends shall be determined by reference to the fixed gross rate of dividend." It appears that under sub-s. (2) of s. 47 of the Finance Act, 1965, of England, income under Sch. F for any assessment year shall be charged in respect of any distribution made in the year on such sum as, after deduction of income-tax thereon at the standard rate, equals the amount or value of the distribution after any deduction of income-tax actually made; and, subject to the enactment to the contrary, the distribution shall be " deemed for purposes of income-tax to ....

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.... on the same income was unsatisfactory. A Government White Paper issued in April, 1964, considered the problems of assimilating income-tax on companies (normally assessed on the basis of the income of the preceding year) with profits tax (assessed on the profits of the current year). Towards the end of 1964, the newly-elected Labour Government decided in favour of a separate tax on company profits and also a tax on distributions, and the Chancellor of the Exchequer made the following preliminary statement 'The essence of my proposals is that the income of all companies and of other bodies within the scope of the profits tax shall become liable to new corporation tax and shall cease to be liable to income-tax and profits tax .... A corpor....