ORIENTAL FIRE GENERAL INSURANCE CO. vs Commissioner of Income Tax

Heard.

Following questions have been referred at the instance of the assessed u/s 18 of the Companies (Profits) Surtax Act, 1964 read with section 256(1) of the Income Tax Act, 1961 by the Tribunal Delhi Bench A, New Delhi :

"1. Whether, on the facts and circumstances of the case, the Tribunal is right in holding that the expression income by way of dividend occurring in rule 1(viii) of 1st Schedule to Companies (Profits) Surtax Act, 1964 means and denotes net income computed under that head and forming part of the assessed income and not gross amount of dividend received by the assessed ?

Whether, on the facts and in the circumstances of the case, the Tribunal is right in cancelling the earlier order in proceedings u/s 254(2) of the Income Tax Act, 1961 ?"

The dispute relates to the assessment year 1971-72.

The factual position need not be noted in detail, in view of the decision of the Apex Court in COMMISSIONER OF INCOME TAX Vs. SUNDRAM INDUSTRIES (P) LTD.,

In view of the decision in the said case, the first question is answered in favor of the revenue and against the assessed by holding that it is the net dividend and not the gross dividend which is to be taken into account. In view of this answer, the second question is really of academic interest.

Reference is accordingly disposed of.