JUDGMENT
K. Raviraja Pandian, J.
The appeal is filed by the revenue by framing the question of law as follows:
“Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing deduction of the interest and expenditure from the business income also without recording a finding that the assessee is also a dealer in shares and a portion of the interest and expenditure is attributable to the business income ?”
2. The case of the revenue is that the Tribunal without giving a finding as to whether the assessee is also a dealer in shares directed to make proportion (sic-apportionment), in respect of the dividend received by them. Hence, without there being any finding that the assessee is a dealer in shares, such a direction for apportionment cannot be legally sustained.
3. However, on seeing the order of the Tribunal, in the very first wording of the second paragraph, it is stated as “that the assessee is a company carrying on business of dealing in shares”, so is the admission made by the Department before the CIT(A), which is manifestly clear from its order, which proceeds that “the argument would appear to be that for an investment company which is a dealer in shares, income derived from shares by way of dividend though for purpose of computation of total income has to be shown separately under other sources, the deduction of expenditure should be made only against the business income and not against the net dividend income derived by the appellant. So, it is clinching that the case of the Department as well as the assessee is that the assessee is a dealer in shares. When the facts of the case itself are projected as stated, we are unable to accept that there is no finding to that effect. The finding has been given only in respect of a fact which is disputed. In this case the fact to the effect is admitted.
4. The learned counsel appearing for the Revenue submitted that though the question of law is not happily worded, the intention with which the appeal has been filed by the Revenue is only to consider whether the dividend so directed to the apportioned by the Tribunal in respect of the two businesses is referable to the gross dividend or net dividend, which argument can also be easily rejected as it is clear from the order of the Tribunal that the dividend directed to be apportioned is only dividend representing the net dividend and not the gross dividend. The Tribunal in its order has categorically held that the deduction under section 80M should be allowed on the net dividend after deduction of the interest on the capital borrowed for investment and not on the gross amount of dividend.
5. Hence, on both the above grounds, the question of law framed that without there being any finding as to whether the assessee-company is dealing in shares, the order passed by the Tribunal cannot be sustained, has to be rejected, as there is a clear finding as well as the admission of the assessee as well as the revenue themselves before all the authorities that the assesseecompany is dealing with shares and of the alternative submission made by the counsel that there is no finding as to whether the apportionment has to be made on the net dividend and gross dividend, which has also been categorically stated in the order passed by the Tribunal that the direction as to apportionment is only on the net dividend, there remains nothing to be adjudicated, and the appeal is liable to be dismissed, and the same is dismissed.
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