COMMISSIONER OF INCOME TAX Vs. AUTOMOTIVE MANUFACTURERS LIMITED

JUDGEMENT

(1.) THIS is an application under S. 256(2) of the IT Act, 1961. The question sought to be referred is :

(2.) IT is evident that the question raised is not as to whether the gross dividend or the net dividend is required to be excluded from the total income under r. 1 (viii) of the First Schedule to the Surtax Act for the purpose of computing chargeable profits. Indeed, such a question could not be raised in the present proceedings, as that question was decided by the CIT (A) originally and the order was accepted by the Department. The question raised herein arises out of the order of the IAC (Assessment) as, while giving effect to the aforesaid appellate order, he held that, under r. 2(i)(a) of the First Schedule, income tax payable on the gross dividend was to be excluded. The Tribunal held, and in our opinion rightly, that the tax payable on the net dividend alone was required to be excluded under r. 2(i)(a). The provisions of r. 2(i)(a) clearly envisage the exclusion of tax payable on income, under certain clauses, included in the total income. It cannot be disputed that what was included in the total income was the net dividend and not the gross dividend. The answer to the question is, thus, obvious. No useful purpose will be served in directing the Tribunal to state the case and refer the question. Rule is, accordingly, discharged with no order as to costs.