CLOTH TRADERS (P) LTD., ETC. vs ADDL. COMMR. OF INCOME TAX, GUJARAT-I,ETC.

The Supreme Court analyzed the provisions of the Income Tax Act, 1961, specifically Sections 85A and 80M, regarding the admissibility of tax rebates on dividends received by companies. The Court held that the rebate is applicable only to the dividend income computed under the Act after deducting interest paid on borrowings for investments. The judgment clarified the scope of deductions available under the Act, affirming that the earlier provisions regarding super-tax exemptions have been replaced and are no longer applicable.