SENGUPTA, J. - (1.) THE rule has been sought for on the following four questions: "1. Whether the Tribunal was justified in allowing a deduction of Rs. 10,221 representing travelling expenses and Rs. 17,245 representing expenditure on law costs and stamps in respect of a defunct business in the computation of the total income of the assessee? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the expenses of Rs. 10,221 on travelling and of Rs. 17,245 on law costs and stamps were incurred in the business interests of the assessee and were deductible in the computation of its total income? 3. Whether the Tribunal had any material to hold that the assessee had not incurred any expenditure for the earning of income by way of dividends and thereby upholding the CIT(A)'s order deleting the expenditure of Rs. 17,270 deducted by the ITO to compute the income from dividends for the purpose of relief under S. 80M of the IT Act, 1961? 4. Whether the Tribunal was justified in upholding the CIT(A)'s order that the deduction under s. 80M would be available in this case on the gross dividends of Rs. 36,680 and not on the net dividends of Rs. 19,410 as computed by the ITO?"
(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. In the premises, we are of the view that the Tribunal was justified in rejecting the reference application on those two questions.
(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.;