SOUTHERN INDUSTRIAL CORPORATION LIMITED Vs. CIT

JUDGEMENT

(1.) THE question referred for our consideration is at the instance of the assessee and concerns the asst. year 1977 78.

(2.) THE initial assessment for that year was made on 20th Feb., 1980. As the assessee had a grievance in respect of a portion of the order of assessment, it filed an appeal, which was allowed. While allowing the appeal, the entire order of assessment was set aside and certain directions were given to the assessing authority to redo the assessment. Thereafter, fresh assessment came to be made on 2nd Feb., 1983. That order of assessment was later revised and the revised order of assessment was made on 11th March, 1985. The assessee did not have any grievance against the order of assessment dt. 11th March, 1985, in which the AO had taken the gross amount of the technical fees received by the assessee for the purpose of deduction under S. 80 O. On 1st July, 1985, the Supreme Court rendered judgment in the case of Distributors (Baroda) (P) Ltd. vs. Union of India & Ors. (1985) 47 CTR (SC) 349 : (1985) 155 ITR 120 (SC) in which it was held that the legislature by enacting S. 80M had intended to grant relief with reference to the amount of dividend computed in accordance with the provisions of the Act and not with reference to the full amount of dividend received from the paying company. It is rightly not disputed by the learned counsel for the assessee that the law laid down in that case with regard to S. 80M is equally applicable to s. 80 O as well.

(3.) THE assessee having been unsuccessful in challenging the order made on 20th Sept., 1995, first before the appellate authority and thereafter before the Tribunal, at the instance of the assessee, the following two questions have been referred to us for our consideration :