CST Vs. MODI INDUSTRIES LTD

JUDGEMENT

(1.) UNDER S. 256(1) of the INCOME TAX ACT, 1961, the Tribunal has referred the following question of law to this Court :

(2.) THE facts, as stated in the statement of the case, are that in respect of the asst. year 1971 -72, the relevant previous year having ended on 31st Oct., 1970, the assessee was liable to assessment under the Companies (Profits) Surtax Act, 1964. In respect of this year, the net chargeable profits were computed at Rs. 60,34,958. The assessee had claimed before the Surtax Officer that in computing the chargeable profits, dividend income of Rs. 2,51,350 was deductible. The Surtax Officer, however, allowed the deduction of Rs. 99,340 on the ground that the balance amount of Rs. 1,52,010 had earlier been allowed under Ss. 80L and 80M of the INCOME TAX ACT, 1961, while computing the total income.

(3.) IN order to appreciate the controversy in issue, it is necessary to refer to r. 1(viii) of the First Schedule to the Surtax Act. The said First Schedule contains the rule for computing the chargeable profits of previous year and it, inter alia, provides as follows" In computing the chargeable profits of a previous year, the total income computed for that year under the IT Act shall be adjusted as follows :