COMMISSIONER OF INCOME TAX Vs. SARABHAI AND SONS

JUDGEMENT

(1.) THE question which is required to be determined in the aforesaid references, is whether the assessee is entitled to relief under s. 80M(1) of the IT Act, 1961, on the net dividend income after or before deduction of the amount admissible under s. 80K of the IT Act, 1961. Hence, at the behest of the learned counsel for the parties, we dispose of all these references by common judgment.

(2.) IN IT Ref. No. 375/84, at the instance of the Revenue, the Tribunal has referred the following question for our opinion under s. 256(1) of the IT Act, 1961 : At the instance of the Revenue

(3.) SUB-s. (2) carves out an exception in the case of a company which is entitled to get deduction under s. 80K as well as s. 80M(1). It provides that, if a company is entitled to deduction under s. 80K, then income by way of dividends shall be reduced by the amount of deduction under s. 80K and on the remaining amount, deduction as provided under s. 80M(1) shall be allowed;