COMMISSIONER OF INCOME TAX Vs. UNITED COLLIERIES LTD

JUDGEMENT

(1.) THE rule has been sought for on the following four questions:

(2.) THE CIT(A) held that the expenses as mentioned in question Nos. 1 and 2, were incurred for the purpose of protecting the company's assets. The Tribunal upheld the finding of the CIT(A). The Tribunal further held that the amounts in question were spent in the business interest of the assessee and were deductible in the computation of its total income. These findings of the Tribunal have not been challenged.

(3.) ALTHOUGH the fourth question is a question of law, particularly in view of the judgment of the Supreme Court in the case of CIT vs. Distributors (Baroda) (P) Ltd. AIR 1972 SC 288, but this question is purely academic in view of the fact that the Tribunal found that for collecting only three dividend warrants, the assessee could not have spent a sum of Rs. 17, 270. The CIT(A) held that the question of allocation of any expenses against the income from dividend did not arise. The finding of the Tribunal is that the dividends which were received from the companies of the same group were sent to the bank for realisation. The sending of three dividend warrants of the Bank would not involve any expenditure. On this fact, the Tribunal upheld the order of the CIT(A) deleting the expenditure deducted by the ITO to determine the dividend income for the purpose of allowance of relief under S. 80M of the IT Act, 1961.