COMMISSIONER OF INCOME TAX Vs. ENEMOUR INVESTMENTS LTD

JUDGEMENT

(1.) PURSUANT to the direction under s. 256 (2) of the IT Act,1961 ('the Act') the following questions were referred by the Tribunal:

(2.) THE facts, inter alia, as appear from the statement of case are that the assessee-company was engaged in the business of dealing in shares and securities, etc., and claimed deduction under s. 80M of the Act on the gross dividend of Rs. 2,51,550 and Rs. 3,10,700 on the shares held by it respectively for the assessment year 1985-86 and1986-87. In the course of assessment the ITO held that the part of the expenditure made by the assessee-company was atributable to earning of the dividend income and in the absence of any apportionment in the books of account the estimate of such expenditure at 5 per cent of the gross dividend of the two years was proper. He accordingly deducted a sum of Rs. 2,51,550 and Rs. 3,10,700 for the two assessment years respectively from the gross dividends and allowed the relief under s. 80M on the net dividend.

(3.) THE revenue was not satisfied with the said direction of the CIT (A) and, hence, came up to the Tribunal. The Tribunal held that the view taken by the CIT (A) appeared to be correct and no interference was called for. Thus, the Tribunal dismissed the Revenue's appeals.