TaxTMI 
TaxTMI 
1996 (9) TMI 14
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....and in the circumstances of the case, is not the Commissioner of Income-tax justified in law in directing the Income-tax Officer to recompute the deduction under section 80T on capital gains after adjusting the business loss? 3. Whether, on the facts and in the circumstances of the case,--- (i) the Tribunal is right in law in relying on a circular issued under section 80M for interpreting and understanding the scope of section 80T? (ii) the circular being one interpreting the scope of section 80M in a particular way is binding on the Revenue in the instant case where the interpretation of section 80T arises for consideration?" The assessment year is 1981-82, for which the relevant accounting year would end on March 31, 1981. The....
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.... Additionally, the Tribunal also relied on Circular No. 58/F-167/24/70-ITA (A-I), dated April 15, 1971. The Tribunal took the view that the deduction under section 80T has to be allowed on the gross income from the capital gains. Accordingly, the error committed by the Commissioner acting under section 263 of the Income-tax Act was corrected and the decision of the Income-tax Officer was restored. It is in this position, the three questions are brought before us by the Revenue. It would be seen that the two decisions, of the apex court in H. H. Sir Rama Varma v. CIT [1994] 205 ITR 433 and CIT v. V. Venkatachalam [1993] 201 ITR 737, succinctly declared the law for guidance in the context. In Rama Varma's case [1994] 205 ITR 433 (SC), the ....
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....ssessee and such loss cannot be or is not wholly set off against income under any other head of income, so much of the loss as has not been so set off or, where the assessee has no income under any other head, the whole loss shall be carried forward to the following assessment year and shall be set off against income, if any, under the head 'Capital gains' assessable for that assessment year and if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year, and so on for a maximum of eight assessment years immediately succeeding the assessment year for which the loss was first computed. Chapter VI-A is titled 'Deductions to be made in computing total income'. Sub-section....
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....is is clear also from the provisions of section 80A which says that in computing the total income of an assessee, there shall be allowed from his gross total income, the deductions specified in, inter alia, section 80T. Where the gross total income of an assessee, determined in accordance with the provisions of the said Act, includes any income by way of long-term capital gains a deduction is permissible therefrom under the provisions of section 80T in computing his total income. The deduction is from 'such income'. As aforementioned, 'such income' has been held by this court to be the assessee's long-term capital gains and there can be no doubt, having regard to the context, of the correctness of this interpretation." It would be seen t....