TMI Blog1988 (12) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... pital gains arising on the sale of house property ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in ignoring the provisions of sections 70(2)(ii) and 80B(5) of the Income-tax Act, 1961, and thereby ignoring the long-term capital loss on the sale of shares in computing the deduction under section 80T(b)(i) of the Income-tax Act, 1961 ?" The facts are that the assessee made long-term capital gains on the sale, of his share in property at 9, Circus Avenue, Calcutta, for Rs. 2,78,250. The assessee also incurred long-term capital loss on sale of certain shares amounting to Rs. 10,266. In addition, it had long-term capital loss brought forward from the assessment year 1966-67 amounting to Rs. 94,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax (Appeals) on this point by observing as under: "We have heard the submissions of both the parties and considered the High Court decisions relied on by both the parties and the; Tribunal order relied on by the assessee's counsel. It is to be noted that there are different views on the point at issue. It is well-settled that in interpreting fiscal statutes, if two views are possible, then the benefit of the view favourable to the taxpayer must be given to him. That being the legal position, we are of the opinion that the Commissioner of Income-tax (Appeals) was justified in directing the Income-tax Officer to allow deduction under section 80T on the gross amount of capital gain that was made on the sale of the house property in questio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure shall represent capital loss. Chapter VI provides for the aggregation of income and set off or carry forward of loss. Sections 70 and 71 provide for the set off of loss from one source against income from another source under the same head of income and set off of loss from one head against income from another respectively. The question of carry forward and set off of business loss against different heads of income for subsequent years is dealt with by section 72 onwards. Section 74 deals with the question of carrying forward of losses under the head "Capital gains" for any assessment year. Chapter VI-A follows thereafter which pertains to the deductions to be made in computing total income. Section 80T which is included in Part of Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the total income and hence unabsorbed depreciation and unabsorbed development rebate were liable to be excluded from profits and gains attributable to the specified business in arriving at the figure eligible to 8% deduction. Tulzapurkar J., speaking on behalf of the court, analysed the provision of sub-section (1) of section 80E and held that the total income of the assessee has to be computed first in accordance with the other provisions of the Act, i.e., in accordance with all the provisions except section 80 E. The Supreme Court proceeded to hold (at p. 94): "As indicated earlier, sub-section (1) contemplates three steps being taken for computing the special deduction permissible thereunder and arriving at the net income exigible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of sub-section (1) of section 80E, the same interpretation must also govern the language of sub-section (1) of section 80M. Structurally, there is hardly any difference between section 80E, sub-section (1), and section 80M, sub-section (1), and the reasoning which appealed to the court in the interpretation of sub-section (1) of section 80E must apply equally in the interpretation of sub-section (1) of section 80M. We find ourselves wholly in agreement with the view taken by this court in Cambay Electric Supply Co.'s case [1978] 113 ITR 84 and we must, therefore, dissent from the interpretation placed on sub-section (1) of section 80M by the decision in Cloth Traders' case [1979] 118 ITR 243 (SC)." We may also refer to section 80B(5). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the income under each head has to be first computed according to the provisions of the Act before considering the special deduction under Chapter VI-A. Thereafter, for the purpose of deduction under section 80T, the computation of capital gains is to be made under section 45 read with section 48 and after the capital losses carried forward from the previous year have been set off against capital gains. If any balance of capital gains remains during the relevant accounting year which is to be added to the gross total income of the year, the question of effecting further deduction as contemplated by section 80T read with section 80B(5) will arise for consideration. If the net result of computation under the long-term capital gains is a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
