1993 (3) TMI 54

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....ce of the Commissioner of Income-tax, the following question of law has been referred to this court under section 256(1) of the Income-tax Act, 1961 ("the Act", for short) : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that for computation of income under the head 'Capital gains' deduction under section 80T of the Income-tax Act, 1961, is to....

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...."Capital gains". On appeal by the assessee, the Appellate Assistant Commissioner set aside the manner of calculation made by the assessing authority by holding that "section 80T deduction would be allowed on the capital gains before the exemption under section 54E is allowed". The Appellate Tribunal confirmed the findings of the Appellate Assistant Commissioner. Section 45 of the Act, as it sto....

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....pital gain would not be chargeable to income-tax. Under section 80T, where the gross total income of an assessee not being a company includes any income chargeable under the head "Capital gains" relating to long-term capital asset, there shall be allowed, in computing the total income of the assessee, a deduction from such income as is provided thereunder. This being the position, for the appli....

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.... gain on the transfer of a long-term capital asset shall be exempt from taxation. If the whole of such income is not exempt, the assessing authority shall determine the income chargeable under the head "Capital gains", and, thereafter, there shall be deduction as provided under section 80T, that is to say, if there is no such income chargeable to tax after exemption under section 54E, the applicat....