TaxTMI 
TaxTMI 
2006 (7) TMI 143
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....this case, the Tribunal is correct in law in holding that the appellant is entitled for the relief in respect of deduction under section 80-O of the Act? Whether, on the facts and circumstances of the case, the Tribunal is correct in law in entertaining the appeal by condoning the delay?" I. T.R.C.No.25/2000: This reference is again at the instance of the Revenue. The assessee received income in foreign currency and it was brought into India. The assessee claimed deduction under section 80-O of the Income-tax Act, 1961, to the extent of 50 per cent. of the amount so brought to India. The amount of foreign currency that was brought to India was Rs. 26,41,795 and 50 per cent. of this was Rs. 13,20,877 which was claimed as deduction. The same was rejected by the Assessing Officer. An appeal was filed and the appeal was allowed. Aggrieved by the same the Revenue went in appeal before the Tribunal. The Tribunal dismissed the appeal filed by the Revenue. Thereafter a reference was sought for by the Revenue and the Tribunal has chosen to refer the following questions of law: "(i) Whether the Tribunal was right in law in holding that the assessee is entitled to deduction under ....
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.... identical claims arising under section 80-O of the Act? (b) Whether, on the facts the Tribunal was at liberty to ignore the judgment of the jurisdictional High Court in the case of CIT v. M. N. Dastur and Co. rendered on June 4, 2001, in C. P. No. 580/1998? (c) Whether, on the facts and circumstances of the case, the appellant was entitled to deduction under section 80-O in respect of the gross receipts from professional or technical services rendered abroad and not in respect of net receipts ?" Heard learned counsel for the parties. Sri Kumar, learned senior counsel for the assessee, would essentially argue that section 80-O, if read carefully would show that what is referable is total income. Total income has been defined under section 80AB of the Act. Learned counsel refers to section 80AB to say that section 80AB has to be excluded from the purpose of total income and for the purpose of deduction in the matter of foreign exchange. He would say that the Tribunal has committed a serious error in reading section 80AB also for the purpose of deduction under section 80-O of the Act. Learned counsel also would argue that the Tribunal has grossly erred in not following th....
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....of section 80-O of the Act would show that a deduction of an amount equal to fifty per cent. of the income so received in, or brought into, India, in computing the total income of the assessee. The gross total income has been defined in clause (5) of section 80AB the same would read as under: "80AB. Where any deduction is required to be made or allowed under any section included in this Chapter under the heading'C.- Deductions in respect of certain incomes' in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the de auction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income. "80B.(5) 'gross total income' means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter." Section 80AB has be....
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....learly is that the mode of computation as indicated in section 80AB has full application to the case relating to section 80-O." Recently, a Division Bench of the Delhi High Court again ruled that deduction under section 80-O was available only on the net income and not on the gross receipts of fees in convertible foreign exchange. Therefore the adjustments could be made by the Assessing Officer under section 143(1)(a). The Calcutta High Court in CIT v. M. N. Dastur and Co. P. Ltd. [2000] 1 243 ITR 10 has ruled as under (headnote): "A careful reading of the provisions of section 80AB of the Incometax Act, 1961, makes it clear that whatever deductions are allowed in respect of any type of income specified in the various provisions under the head 'C' of Chapter VI-A will be subject to the provisions of section 80AB. The provision of section 80AB starts with a non obstante clause, 'notwithstanding anything contained in that section' for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with provisions of this Act, 'shall alone be deemed to be amount of income for the purpose of deduction under that section'....
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....culiar facts of that case. The Division Bench noticed in para. 3 of its order that on an earlier occasion the Calcutta High Court answered the questions of law in favour of the assessee in I. T. P. No. 112 of 1998 in G.A. No. 2692 of 1998. Noticing the judgment of the Calcutta High Court in respect of the very assessee in that case, the Division Bench answered the questions of law against the Revenue and the Division Bench has chosen to add by way of a rider that it is being done to avoid contradictions in orders relating to the same assessee on the same questions of law. The Division Bench ruled in favour of the assessee only in the light of another order passed by the Calcutta High Court in favour of the assessee. That judgment is not available to the assessee in the case on hand. The judgment as referred to in the Division Bench order, i.e., the judgment of the Calcutta High Court in I. T. P. No. 112 of 1998 in G. A. No. 2692 of 1998 has subsequently been overruled by the Supreme Court in Motilal Pesticides (I) P. Ltd. v. CIT [2000] 243 ITR 26. This is an additional factor which compels us not to accept the case of the assessee. Sri Kumar, learned counsel, also would argue th....