TaxTMI 
TaxTMI 
2004 (10) TMI 65
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....e case, the Income-tax Appellate Tribunal was legally correct in holding that deduction under section 80P(2)(d) of the Income-tax Act, 1961 is allowable on the gross amount of interest ignoring the provisions of section 80B(5) which defines the term 'gross total income' in such a way that it could only mean net income before making any deduction under Chapter VI-A or section 280-O and without applying the provisions of section 64?" Whereas Income-tax Reference No. 29 of 1987 relates to the assessment year 1979-80 wherein the Income-tax Appellate Tribunal, New Delhi, has referred the following question of law under section 256(1) of the Act for the opinion to this court: "Whether, on the facts and in the circumstances of the case, the ....
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....pearing for the Revenue submitted that in view of section 80B(5) of the Act, only the net amount of the income derived by the respondent is to be allowed as deduction under section 80P(2)(d) of the Act. He invited the attention of the court to the following decisions: (1) Hansraj Gordhandas v. H.H. Dave, Assistant Collector of Central Excise and Customs, AIR 1970 SC 755; and (2) CIT v. Doaba Co-operative Sugar Mills Ltd. [1998] 230 ITR 774 (P&H). Sri Vikram Gulati, learned counsel for the respondent, however, submitted that from the mere reading of section 80P(2)(d) of the Act it clearly shows that the whole of the income received by way of interest or dividend by a co-operative society from its investment is to be allowed as a ded....
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....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 0f computing the deduction 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." In the case of Hansraj Gordhandas, AIR 1970 SC 755 the apex court has held that it is well established that in a taxing statute there is no room for any int....
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....t in the case of Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120. Notwithstanding that the decision of the apex court in the case of Cloth Traders (P.) Ltd. [1979] 118 ITR 243 (SC) has been overruled subsequently by the apex court in the case of Distributors (Baroda) P. Ltd. [1985] 155 ITR 120, learned counsel appearing for the respondent has cited the aforesaid decision. We are constrained to deprecate such a practice. The apex court in the case of State of Orissa v. Nalinikanta Muduli [2004] AIR SCW 4713 ; [2004] AIR 2004 SC 4272, has deprecated such practice in the following words: "It is strange that a decision which has been overruled by this court nearly quarter of a century back was cited by the Bar and the cour....
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....court interpreted section 80M in a manner different from that placed upon it in Cloth Traders (P.) Ltd. [1979] 118 ITR 243 (SC) and overruled the said decision. It did not consider the question of constitutional validity of the retrospective operation of section 80AA but held that it was in retrospective operation, merely declaratory of the law as it always had been since April 1, 1968, when the provisions of Chapter VI-A were introduced. The apex court in the case of H.H. Sir Rama Varma v. CIT [1994] 205 15 ITR 433 has held that on a parity of reasoning given by it in the case of Distributors (Baroda) P. Ltd. [1985] 155 ITR 120 (SC) it must be held that section 80AB was enacted to declare the law as it always stood in relation to the de....