1993 (8) TMI 108

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....e sales and closing stock were brought to the credit side of the profit and loss accounts. The net profit as per profit and loss account was Rs. 9,40,871 and Rs. 4,88,874 respectively. The computation of the total income starts from its figures in the assessment orders. The dividends of Rs. 1,68,400 and Rs. 2,83,312 were excluded from the business income and brought to tax under the head ' Other sources '. While so doing, the Income-tax Officer estimated that an amount of Rs. 25,000 for the assessment year 1986-87 and Rs. 50,000 for the assessment year 1987-88 was referable to the earning of the dividends. Therefore, he deducted the estimated expenses from the dividend income and granted deduction under section 80M of the Act on the balance....

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....' of the assessee and the expenditure incurred by the assessee should be allowed under that head and cannot be apportioned against income arising under two different heads, namely ' business ' and ' dividend '. It was further held that even if the income of the assessee was referable only to dividend, there cannot be any apportionment, as the entire expenditure would be allowable against dividend income. This decision is not of any assistance to the assessee, since it relied to the allowability of the expenses under section 57 of the Act. The decision of the Calcutta High Court in the case of CIT v. National & Grindlays Bank Ltd., [1993] 202 ITR 559 is directly in favour of the assessee. In that decision, the High Court was concerned with t....