Cit v. P.K Jhaveri

Order

1. This is a reference, at the instance of the Commissioner of Income Tax, Bombay, to this Court under Section 257 of the Income Tax Act, 1961 (“the Act”) by the Income Tax Appellate Tribunal. It is not necessary to set out the facts at length since the question referred has already been decided by this Court subsequent to the reference.

2. The question that has been referred to us reads as follows:

“Having regard to the definition of ‘gross total income’ under Section 80-B(5) whether in the facts and in the circumstances of the case, the Tribunal was justified in allowing deduction under Section 80-K on the gross dividend income without taking into account deduction for interest paid on moneys borrowed specifically for investment in shares?”

3. The question posed has been answered in the negative by the decisions of this Court in Cambay Electric Supply Industrial Co. Ltd. v. CIT (1978) 2 SCC 644, (1978) 113 ITR 84 and in Distributors (Baroda) (P) Ltd. v. Union of India (1986) 1 SCC 43, (1985) 155 ITR 120. It may be mentioned that the statutory provisions have also been subsequently modified by the insertion of Section 80-AB w.e.f 1-4-1981.

4. In view of the above decisions, the question referred to us is answered in the negative and in favour of the appellant. The Tribunal will dispose of the case conformably to this judgment under Section 260 of the Act.

5. There will be no order as to costs.