COMMISSIONER OF INCOME TAX, MADRAS vs M/S. P.S.S. INVESTMENTS (P) LTD.

The Supreme Court addressed two questions under Section 66(1) of the Indian Income-tax Act, 1922, concerning the computation of rebate under the Finance Acts of 1958 and 1959. The Court held that the Appellate Tribunal correctly determined that the profits from which dividends were declared should be considered for rebate calculations, and that the paid-up capital of the company should be proportionately reduced for rebate purposes. The judgment of the Madras High Court was affirmed, favoring the assessee against the revenue.