Judgment :- MISHRA, J. Our attention has been drawn to a judgment of the Supreme Court in the case of Distributors (Baroda) P. Ltd. v. Union of India 1985 AIR(SC) 1585, 1985 (S1) SCR 778, 1986 (1) SCC 43 , 1985 (1) SCALE 1216 , 1985 (2) CompLJ 389, 1985 (155) ITR 120, 1986 (1) UJ 86 , 1985 (47) CTR 349, 1985 (22) TAXMAN 49, 1986 SCC(Tax) 159, 120 SCC(p) 46, 1985 (47) CTR(SC) 349 and the judgment of this court in Virudhunagar Textile Mills Ltd. (Tax Cases Nos. 136 and 137 of 1979) (order dated June 19, 1986), under which, it has been pointed out that it will be right in law in holding that in arriving at the chargeable profit for purposes of surtax assessment, under the Companies (Profits) Surtax Act, 1964, the net dividend should be deducted from the total income and not the gross dividend. The Supreme Court judgment, true, is in respect of the payment of income-tax and not under the Companies (Profits) Surtax Act ; but the judgment of this court in Tax Cases Nos. 136 and 137 of 1979 has extended the application of the said principle to the Companies (Profits) Surtax Act also, and in our opinion, rightly. The question, therefore, whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that in arriving at the chargeable profits for the purpose of surtax assessment for the assessment year 1972-73, the gross dividend should be deducted from the total income instead of the net dividend, which ultimately came to be included in the total income after allowance of relief under section 80M of the Income-tax Act, 1961 1991 (187) ITR 108, 1995 (S1) SCC 151, 1991 (94) CTR 160, 1990 (94) CTR(SC) 160, "there is a preponderance of judicial opinion in favour of the assessee, with which we agree" The reference is answered accordingly. No costs.