Dipak Kumar Sen, J. - (1.) This reference is at the instance of the Commissioner of Income-tax, West Bengal-II, Calcutta, under Section 256(2) of the Income-tax Act, 1961. This court has directed the Tribunal to draw up a case and refer the following question : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Income-tax Officer was not justified in apportioning the total expenditure incurred by the assessee as between the several heads of income and treating the appropriate portion thereof as expenditure against the dividend income ? "
(2.) The facts admitted and/or found are in short as follows : New India Investment Corporation Ltd., the assessee, is an investment company and also deals in shares. The assessee derives income from business, interest on securities, dividends and other sources.
(3.) In its income-tax assessments for the assessment years 1963-64, 1964-65 and 1965-66, the assessee claimed deduction of its expenditure respectively of Rs. 79,560, Rs. 89,125 and Rs. 63,308 as business expenditure. The Income-tax Officer took the view that a portion of such expenditure was attributable to the dividend income of the assessee in the said years and accordingly he apportioned the expenditure in a certain manner between the business income and the dividend income and allowed deduction on a pro rata basis.;