Cit Vs. Dugdh Utpadak Sangh Ltd. - Court Judgment

Excerpt:
counsels: shambhu chopra, for the applicant vikram gulati, for the respondent. in the allahabad high court r.k. agrawal & prakash krishna, jj. - indian penal code, 1860 [c.a. no. 45/1860]. section 302; [m.c. jain, r.c. deepak & k.k. misra, jj] murder plea as to accused being minor school register and transfer certificate not proved before court according to law held, it has to be ignored and question of age is to be determined on other evidence and circumstances surfacing on record. age determined on the basis of x-ray plates and report prepared by c.m.o., is the correct age of accused. accused was declared to be child on the date of commission of offence of murder. however, considering fact that now accused was around 41 years, he cannot be sent to approved school. accused was directed to pay fine of rs.25,000/- under section 302 i.p.c., amount of fine was directed to be paid as compensation to wife of deceased. mohammadorder1. the income tax appellate tribunal, new delhi has referred the following question of law under section 256(2) of income tax act, 1961 (hereinafter referred to as the act) for opinion to this court :'whether on the facts and in the circumstances of the case, the income tax appellate tribunal was legally correct in holding that deduction under section 80p(2)(d) of the income tax act, 1961 is allowable on the gross amount of interest ignoring the provisions of section 80b(5) which defines the term 'gross total income' in such a way that it could only mean net income before making any deduction under chapter vi-a or section 280-o and without applying the provisions of section 64?'briefly stated the facts giving rise to the present reference are as follows :2. the reference relates to the assessment year 1972-73. the respondent-assessee is a co-operative society. during the assessment year in question it has received rs, 67,807 by way of interest from the primary societies and had also paid rs. 46,441 as interest on loan taken from the, u.p. government and it claimed deduction under section 80p(2)(b) on the gross amount of rs. 67,807. the income tax officer, however, allowed deduction only on the net income by way of interest amounting to rs. 21366. however, in appeal, the commissioner (appeals) had upheld the claim of the respondent and had held that the entire amount of interest is allowable as deduction which orders has been upheld by the income tax appellate tribunal by following the decision of the apex court in the case of cloth traders (p) ltd. v. addl. cit : [1979]118itr243(sc) .3. we have heard shri shambhu chopra, the learned counsel for the revenue and shri vikram. gulati, the learned counsel for the respondent. it may be mentioned here that the decision of the apex court in the case of cloth traders (p) ltd. (supra) has been overruled by the supreme court in the case of distributors (baroda) (p) ltd. v. union of lndia : [1985]155itr120(sc) . moreover, in view of insertion of section 80ab in the income tax act, which has been held by the apex court in the cases of h.h. sir rama varma (deed by legal representatives) v. cit : [1994]205itr433(sc) moti lal pesticides (i) (p) ltd. v. cit : [2000]243itr26(sc) and n.n. bhagwati v. cit : [2001]247itr206(sc) to be retrospective in operation the deduction under chapter vi-a of the income tax act is allowable only on the net income and not on the gross income. identical claim came up for consideration before this court in the case of respondent-assessee itself in itr no. 153 of 1985 and itr no. 29 of 1997in this view of the matter we answer the question of law referred to us in the negative i.e., in favour of the revenue and against the assessee. however, there shall be no order as to costs.

Judgment:
ORDER

1. The Income Tax Appellate Tribunal, New Delhi has referred the following question of law under section 256(2) of Income Tax Act, 1961 (hereinafter referred to as the Act) for opinion to this court :

'Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was legally correct in holding that deduction under section 80P(2)(d) of the Income Tax Act, 1961 is allowable on the gross amount of interest ignoring the provisions of section 80B(5) which defines the term 'Gross total income' in such a way that it could only mean net income before making any deduction under Chapter VI-A or section 280-O and without applying the provisions of section 64?'

Briefly stated the facts giving rise to the present reference are as follows :

2. The reference relates to the assessment year 1972-73. The respondent-assessee is a co-operative society. During the assessment year in question it has received Rs, 67,807 by way of interest from the primary societies and had also paid Rs. 46,441 as interest on loan taken from the, U.P. Government and it claimed deduction under section 80P(2)(b) on the gross amount of Rs. 67,807. The Income Tax Officer, however, allowed deduction only on the net income by way of interest amounting to Rs. 21366. However, in appeal, the Commissioner (Appeals) had upheld the claim of the respondent and had held that the entire amount of interest is allowable as deduction which orders has been upheld by the Income Tax Appellate Tribunal by following the decision of the Apex Court in the case of Cloth Traders (P) Ltd. v. Addl. CIT : [1979]118ITR243(SC) .

3. We have heard Shri Shambhu Chopra, the learned counsel for the revenue and Shri Vikram. Gulati, the learned counsel for the respondent. It may be mentioned here that the decision of the Apex Court in the case of Cloth Traders (P) Ltd. (supra) has been overruled by the Supreme Court in the case of Distributors (Baroda) (P) Ltd. v. Union of lndia : [1985]155ITR120(SC) . Moreover, in view of insertion of section 80AB in the Income Tax Act, which has been held by the Apex Court in the cases of H.H. Sir Rama Varma (deed by legal representatives) v. CIT : [1994]205ITR433(SC) Moti Lal Pesticides (I) (P) Ltd. v. CIT : [2000]243ITR26(SC) and N.N. Bhagwati v. CIT : [2001]247ITR206(SC) to be retrospective in operation the deduction under Chapter VI-A of the Income Tax Act is allowable only on the net income and not on the gross income. Identical claim came up for consideration before this court in the case of respondent-assessee itself in ITR No. 153 of 1985 and ITR No. 29 of 1997

In this view of the matter we answer the question of law referred to us in the negative i.e., in favour of the revenue and against the assessee. However, there shall be no order as to costs.