Section 80B — the law in short
What the courts have decided on section 80B, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Distributors (Baroda) Pvt Ltd v Union of India
Supreme CourtHelps department
Is my inter-corporate dividend deduction worked out on the gross dividend I received, or on the dividend after deducting the interest I paid to buy the shares?
On the net figure. A five-judge bench of the Supreme Court held that the deduction under section 80M is not from gross total income but from 'such income by way of dividends', which means the dividend income as computed under the Act and included in gross total income, after the expenditure attributable to earning it. Cloth Traders, which had held otherwise, was overruled as manifestly wrong and inconsistent with Cambay Electric Supply. Section 80AA, enacted retrospectively to reverse Cloth Traders, was therefore merely declaratory of the law as it always stood, and its validity did not arise. The writ petition was dismissed.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.