Suhas Chandra Sen, J. - (1.) The Tribunal has referred the following two questions of law under Section 256(1), Income-tax Act, 1961 : "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the tax deducted at source on dividend could not be treated as income for the purposes of Section 11, Income-tax Act, 1961, and in that view in directing the Income-tax Officer to exclude the amount of tax deducted at source from the income of the assessee ?
(2.) " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding the entire gross dividend income under Section 80K, Income-tax Act, 1961, and the pro rata basis applied by the Income-tax Officer for giving relief under Section 80K, Income-tax Act, 1961, was not correct ?" 2. The assessee, Jayashree Charity Trust, is a charitable trust. The relevant assessment year for the purpose of this case is 1973-74 for which the accounting period ended on March 31, 1972.
(3.) The assessee held a large number of shares. The gross dividend income from the shares was Rs. 3,49,696. The net dividend received by the assessee after deduction of tax at source during the relevant accounting period was Rs. 2,72,722. The assessee, in his return of income, did not include the amount of the tax deducted at source. The assessee's case was that the amount deducted at source had not been received by the assessee and could not be applied by the assessee for the objects of the trust. The entire amount that was received by the assessee after deduction of tax at source had been spent for charitable purposes.;