TaxTMI 
TaxTMI 
1997 (3) TMI 1
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.... income from dividend from investments with other co-operative societies. In the previous year relevant to the assessment year 1972-73, the assessee earned a total income of Rs. 85,150. The losses of the earlier year which had been carried forward to the said assessment year were Rs. 1,82,744. The assessee claimed a deduction of Rs. 53,386 under section 80P(2) from the income of Rs. 85,150. The Income-tax Officer first set off the losses of previous years that had been carried forward against the income and since the losses were in excess of the income, he held that no deduction was permissible under section 80P of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The said. view of the Income-tax Officer was not accepted by t....
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....ing for the Revenue, has submitted that the High Court was in error in proceeding on the basis that the deduction under section 80P must be made before the adjustment of the losses of the previous year under section 72 of the Act. Learned counsel has placed reliance on the definition of the expression "gross total income" contained in section 80B(5) and has contended that the decision in Cloth Traders (P) Ltd. [1979] 118 ITR 243 (SC) has since been reversed by a Constitution Bench of this court in Distributors (Baroda) Pvt. Ltd. v. Union of India [1985] 155 ITR 120. Dr. Gaurishankar has also invited our attention to the recent decision in H. H. Sir Rama Varma v. CIT [1994] 205 ITR 433 (SC). Mrs. Janaki Ramachandran, learned counsel appea....
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.... If section 80P(1) is read with the definition of the expression "gross total income" contained in section 80B(5), it has to be held that for the purpose of making deduction under section 80P, it is necessary to first determine the gross total income in accordance with the other provisions of the Act. This means that for the purposes of the present case the gross total income must be determined by setting off against the income the business losses of the earlier years as required under section 72 of the Act. In Distributors (Baroda) Pvt. Ltd.'s case [1985] 155 ITR 120 this court has dealt with the question whether deduction of income by way of dividends under section 80M has to be made from the income computed in accordance with the p....
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....ned in sub-section (1) of section 80M. The condition is that the gross total income of the assessee must include income by way of dividends from a domestic company. 'Gross total income' is defined in section 80B, clause (5), to mean the 'total income computed in accordance with the provisions of the Act before making any deduction under Chapter VI-A or under section 280-O'. Income by way of dividends from a domestic company included in the gross total income would, therefore, obviously be income computed in accordance with the provisions of the Act, that is, after deducting interest on moneys borrowed for earning such income. If income by way of dividends from a domestic company computed in accordance with the provisions of the Act is inclu....
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.... of the current assessment year before the deduction contemplated by section 80T of the Act is allowed and the relief under section 80T is to be given only for the amount of long-term capital gains of the current assessment year after the long-term capital loss of the earlier years brought forward is set off. It is no doubt true that the decision of the Madras High Court in CIT v. V. Venkatachalam [1979] 120 ITR 688 has been affirmed in appeal by this court in CIT v. Venkatachalam [1993] 201 ITR 737. That decision was also given in the context of section 80T of the Act. It has been taken note of by this court in H. H. Sir Rama Verma v. CIT [1994] 205 ITR 433 (SC). B. P. Jeevan Reddy J. was a party in both these decisions. In Venkatachala....