For the Assessment Year 2002 2003, the appellant Company filed its return declaring a total loss of Rs.45,90,39,210/ .
It is also a promoter of various other companypanies and invests its funds in such companypanies in order to maintain companytrol of such companycerns as sister companycerns.
Furthermore, as against the investment of Rs.125.54 crore as on 31st March, 2002, on the said date the appellant had a total of Rs.280.64 crore by way of interest free funds in the form of share capital Rs.6.55 crore as well as Reserves and Surplus Rs.274.09 crore .
A sum of Rs.66,79,000/ , companystituting 1.95 of the aforesaid dividend income, came from mutual funds.
The issue in the present appeal relates to the admissibility or otherwise of deduction of expenditure incurred in earning dividend income which is number includible in the total income of the Assessee by virtue of the provisions of Section 10 33 of the Income Tax Act, 1961 hereinafter referred to as the Act as in force during the relevant Assessment Year i.e. 2002 2003.
Dividend income to the extent of 98 of the said amount was companytributed by the Godrej group companypanies whereas only 0.05 thereof amounting to Rs.1,71,000/ came from number Godrej group companypanies.
On the other hand, as against the investment of Rs.127.19 crore on the first day of the previous year i.e. 1st April, 2001, the appellant had a total of Rs.270.51 crore by way of interest free funds in the form of share capital Rs.6.55 crore and Reserves and Surplus Rs.263.96 crore .
In the said return, it had shown income by way of dividend from companypanies and income from units of mutual funds to the extent of Rs.34,34,78,686.
RANJAN GOGOI, J. The appellant Company, incorporated in the year 1932, is engaged in the business of manufacture of steel furniture, security equipments, typewriters, electrical equipments and a host of other related products.
