COMMISSIONER OF INCOME TAX Vs. WARREN TEA LTD

JUDGEMENT

(1.) IN this application under Section 256(1) of the INcome-tax Art, 1961, the Tribunal has referred the following question :

(2.) THE assessee is the owner of 13 tea gardens. All these are situated in upper Assam. THE assessee derives income from these tea gardens. In addition to that, the assessee has also received dividend income and claimed the benefit of Section 32AB of the Act on the dividend income also. That has been denied by the Assessing Officer. In appeal before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) also found that the assessee is not entitled for deduction under Section 32AB on the dividend income. In appeal before the Tribunal, it is recorded that Section 32AB(3) says what the profits of the business of an assessee for the purpose of Sub-section (1) are and according to the said sub-section, the profits shall be an amount arrived at after deducting an amount equal to the depreciation as per Section 32(1) from the profits computed as per the requirements of Parts II and III of Schedule VI to the Companies Act, 1956. And as the assessee has shown these dividends as part of the business profits in the profit and loss account prepared as per the requirements of the Companies Act, the assessee is entitled for deduction under Section 32AB, on the dividend income also. Some Tribunal decisions were also referred to wherein a similar view has been taken by the Tribunal.

(3.) IN the result, we answer the question in the negative, i.e., in favour of the Revenue and against the assessee. The reference so made is disposed of accordingly.