1993 (12) TMI 23

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....s eligible for relief, under section 80P(2)(d), of Rs. 93,846 ? " The assessee is the Surat District Co-operative Milk Producers' Union Limited. For the assessment year 1976-77, it claimed that interest amount of Rs. 93,846 received from other co-operative societies should be deducted as provided under section 80P(2)(d) of the Act. The Income-tax Officer rejected the said claim by holding that the ultimate result of the interest amount was a loss and, hence, the gross total income of the assessee did not include any interest income from co-operative societies and, therefore, the assessee did not qualify for relief under section 80P(2)(d) of the Act. The Commissioner of Income-tax (Appeals) also confirmed the said order. In appeal, the Tr....

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....following observations from the decision in the case of Cambay Electric Supply Co. [1978] 113 ITR 84, 91, 94 (see also [1985] 155 ITR 120, 139) " On reading sub-section (1), it will become clear that three important steps are required to be taken before the special deduction permissible thereunder is allowed and the net total income exigible to tax is determined. First, compute the total income of the concerned assessee in accordance with the other provisions of the Act, i.e., in accordance with all the provisions except section 80E ; secondly, ascertain what part of the total income so computed represents the profits and gains attributable to the business of the specified industry (here generation and distribution of electricity) ; and,....

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....0E, the same interpretation must also govern the language of sub-section (1) of section 80M. Structurally, there is hardly any difference between section 80E, sub-section (1), and section 80M, subsection (1), and the reasoning which appealed to the court in the interpretation of sub-section (1) of section 80E must apply equally in the interpretation of sub-section (1) of section 80M. " With regard to interpretation of section 80P, the decision in Distributors (Baroda) P. Ltd.'s case [1985] 155 ITR 120 (SC) is followed by the Supreme Court in the case of Sabarkantha Zilla Kharid Vechan Sangh Ltd v. CIT [1993] 203 ITR 1027. Hence, the aforesaid principles would apply in the interpretation of section 80P. At this stage, learned counsel f....