2009 (8) TMI 41

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....with the Assessing Authority by withdrawing the claim u/s 36(1)(viii) to the extent of Rs.2115210/- to be calculated as 40% on total income of the appellant from all sources and not from profits of business of providing long term finance for A.Y.1987-88 and further upholding the action taken u/s 154, being mistaken apparent from record? 2. Whether the Tribunal was correct in law by not appreciating and interpreting the amendment in section 36(I)(viii) for calculating 40% of profit from providing long terms fiancé in place of 40% of total income w.e.f. 1.4.96 is only clarificatory in nature and retrospectively applicable? ITA No.5 of 2001 has also been admitted on similar substantial questions of law. Admittedly, the assessee i.e. ....

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....e assessee in respect of its other business had not been taken into consideration, which fact is not disputed. If the losses on account of other business are taken into consideration, the total net gross income for the years 1987-88 and 1988-89 would be Rs.1,19,27,406/- and Rs.1,22,89,185/-, respectively and consequently 40% deduction would amount to Rs.47,79,963/- and Rs.49,15,674/-respectively. This matter was contested by the assessee but the assessee has lost throughout before the revenue authorities. Hence the present appeals. To appreciate the question involved, it would be relevant to refer to Section 36(1)(viii), as applicable for the assessment years in questions. The same reads as follows: "in respect of any special reserve ....

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....tained by a financial corporation which is engaged in providing long-term finance for industrial or agricultural development or development of infrastructure facility in India or by a public company formed and registered in India with the main object of carrying on the business of providing long-term finance for construction or purchase of houses in India for residential purposes, an amount not exceeding forty per cent of the profits derived from such business of providing long-term finance (computed under the head "Profits and gains of business or profession" before making any deduction under this clause) carried to such reserve account: XXXXXX XXXXXXX XXXXXXX XXXXXX XXXXXXX XXXXXXX" (emphasis supplied) There can be no manner o....