1981 (5) TMI 35 - AT - Income Tax

Summary

Issues:
1. Computation of capital for relief under section 80J.
2. Eligibility for relief under section 80P (2)(d) regarding interest/dividend income from co-operative societies.

Issue 1: Computation of capital for relief under section 80J:
The assessee, a co-operative society eligible for relief under section 80J, had its capital computed by deducting liabilities and losses, with relief granted on the remaining balance. The ld. CIT(A) upheld this method. However, a dispute arose regarding the retrospective amendment of section 80J. The Tribunal set aside the CIT(A)'s order, directing a decision post the Supreme Court's ruling on the retrospective applicability of the amendment. The Tribunal specified that if the amendment did not apply, the CIT(A) should follow the decision of the Calcutta High Court in Century Enka Ltd. case.

Issue 2: Eligibility for relief under section 80P (2)(d) regarding interest/dividend income from co-operative societies:
The assessee received interest/dividend from other co-operative societies and claimed relief under section 80P (2)(d). The ITO disallowed the claim as the interest account ultimately showed a loss. The ld. CIT(A) dismissed the appeal, noting the absence of specific references to section 80P in relevant Supreme Court judgments. The assessee contended that the interest income should be included in the gross total income, citing the decision in Cloth Traders (P) Ltd. case. The Tribunal agreed with the assessee, emphasizing that the relief under section 80P should be based on the gross total income, as explained by the Supreme Court in other related sections of Chapter VI-A. Therefore, the Tribunal allowed the appeal, holding the assessee eligible for relief under section 80P (2)(d) for the interest income from co-operative societies.

In conclusion, the Tribunal addressed the computation of capital for relief under section 80J and the eligibility for relief under section 80P (2)(d) concerning interest/dividend income from co-operative societies. The Tribunal set aside the CIT(A)'s order on the section 80J computation pending a Supreme Court decision on retrospective amendments. Regarding section 80P (2)(d), the Tribunal allowed the appeal, holding that the interest income from co-operative societies should be included in the gross total income for the purpose of relief under section 80P.