Sabyasachi Mukharji, J. - (1.) In this reference under Section 256(1) of the I.T. Act, 1961, we are concerned with the assessment years 1966-67, 1967-68 and 1968-69, for which the relevant previous years ended on 31st December, 1965, 31st December, 1966, and 31st December, 1967, respectively.
(2.) The assessee-company held certain shares in U. K. companies on which it also received dividends during the assessment years under reference. The ITO, observing that the assessee had a right to get tax credit or refund from the foreign government which would constitute income in its hands, held that the foreign dividends were to be taken at gross for inclusion in its total income. Such gross dividends worked out to Rs. 16,411, Rs. 13,901 and Rs. 2,287 in the assessment years 1966-67, 1967-68 and 1968-69, respectively. Simultaneously he also allowed reliefs under Section 91 of the Act on the above inclusions.
(3.) The assessee, thereafter, being aggrieved, went up before the AAC and contended that foreign dividends should have been taken only at the net figure and the reliefs should also have been allowed only on such net amount. The AAC, relying on the opinion given by the U.K. tax consultants, held that only the net foreign dividend should be taken for taxation and not the gross. Following certain decisions of the Tribunal, he also agreed with the assessee that it was entitled to relief under Section 91 of the Act on such net foreign dividend included in its total income.;