Commissioner of Income Tax vs United India Fire and General Insurance Co.

Ramanujam, J.—For the assessment year 1971-72 and 1972-73, the following two questions have been referred to this court for its opinion

by the Income Tax Appellate Tribunal at the instance of the Revenue :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the gross dividend income should be

deducted while computing the chargeable profits for the purpose of surtax and not the dividend income for 1971-72 and 1972-73 ? and

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in directing the Income Tax Officer to exclude the

sum of Rs. 2,45,000 for calculating the calculating the cost of investments for the application of rule 2 of the Second Scheduled to the Companies

(Profits) Surtax Act, 1964, for the assessment year 1971-72 ?

So far as the first question is concerned, we find that it is covered by a decision rendered by this court in T.C. Nos. 1196 to 1198 of 1977,

dated October 6, 1983 Commissioner of Income Tax, Tamil Nadu-IV, Madras Vs. Sundaram Industries (P) Ltd., . In view of the said decision,

the first question has to be answered against the Revenue and it is answered accordingly.

Coming to the second question, it is also covered by the decision of this court in Additional Commissioner of Income Tax Vs. Madras Motor

and General Insurance Co. Ltd., , which is against the Revenue. Therefore, the second question is also answered against the Revenue. There will,

however, be no order as to costs.