1992 (10) TMI 69

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....stions have been referred to this court under section 256(1) of the Income-tax Act, 1961 (in short, " the Act " ), by the Income-tax Appellate Tribunal, Cuttack Bench, Cuttack (in short, "the Tribunal") : " (i) Whether, on the facts and in the circumstances of the case, the assessee is entitled to deduction of Rs. 11,59,027 under section 80P(2)(a) of the Income-tax Act, 1961 ? (ii) On the fa....

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....duction of Rs. 11,59,027 being the income from business in minor forest produce without making any adjustment for the loss of Rs. 45,623 incurred on business in marketing of agricultural produce of its members ? " For the assessment year 1983-84, the assessee, a co-operative society, claimed exemption in terms of section 80P(2)(a)(ii) and (iii) on the ground that it derived income from business....

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.... was endorsed by the Tribunal. Thereafter reference was sought for to this court under section 256(1) of the Act which was acceded to by the Tribunal. The assessee admittedly was engaged in two activities of cottage industries and marketing of agricultural produce of its members which are eligible for deduction under section 80P(2)(a). Income from both the activities are exempted under section 80P....

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....me under a particular source and it does not appear to be the legislative intent that the deduction is to be brought down to net income in a particular head of income. The language of section 80P(2) makes it clear that profit attributable to cottage industry is to be deducted from the total gross income. The total deduction under Chapter VI-A is limited to the extent of gross total income. The obj....