TMI Blog1987 (3) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income-tax Act, 1961 ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that reimbursement of tax paid by the employees does not come within the purview of section 40(a)(v) of the Income-tax Act, 1961 ? (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing deductions under sections 80L and 80M of the Income-tax Act, 1961, before setting off the business losses for the year in consideration against the gross total income ? " The first two questions can be considered together. Their phraseology indicates the relevant facts. The issue involved therein is covered by the decision of this court in CIT v. Indokem P. Ltd. [1981] 132 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsy. Since money cannot be converted into money, it must be held that an allowance paid in cash does not fall within the ambit of the provision. We see no good reason, therefore, to suggest a reconsideration of this court's judgment in the case of Indokem Pvt. Ltd. [1981] 132 ITR 125. Our attention was drawn to the judgment of the Andhra Pradesh High Court in CIT v. Warney Hindustan Ltd. [1984] 145 ITR 24. In rejecting an application under section 256(2) of the Income-tax Act, 1961, in relation to a question concerning cash allowances, the Andhra Pradesh High Court noted that the Supreme, Court had refused to grant special leave to appeal from the judgment of this court in a similar matter, the reference obviously being to the judgment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noor Tea and Rubber Co. Ltd. [1974] 93 ITR 115. To appreciate the contentions, it is necessary to set out the provisions of section 80A, sub-sections (1) and (2); section 80B, sub-section (5); section 80L and section 80M(1) of the Income-tax Act, 1961. They read thus: "80A. (1) In computing the total income of an assessee, there shall be allowed from his gross total income, in accordance with and subject to the provisions of this Chapter, the deductions specified in sections 80C to 80U. (2) The aggregate amount of the deductions under this Chapter shall not, in any case, exceed the gross total income of the assessee." 80B. (5) In this Chapter 'gross total income ' means the total income computed in accordance with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 161 ITR 556, and of the Madras High Court in CIT v. Rambal (P.) Ltd. [1988] 169 ITR 50. It is necessary first to interpret the provisions aforesaid. They fall within Chapter VII-A. Sub-section (1) of section 80A of the Income-tax Act, 1961, empowers the taxing authorities, in computing the gross total income of an assessee, to allow the deductions specified in Chapter VI-A from the assessee's gross total income. Sub-section (2) provides that the aggregate amount of the deductions under Chapter VI-A should not, in any case, exceed the gross total income of the assessee. The gross total income, defined by section 80B(5) of the said Act, is the total income computed under the provisions of the Act but before making any deduction under Chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act, 1961, that the deductions under Chapter VI-A, which includes section 80-M of the said Act, are to be allowed from the assessee's gross total income. This is necessary because section 80A(2) provides that the aggregate amount of the deductions under the Chapter shall not exceed the assessee's gross total income. It is, therefore, not possible to accept Mr. Dastur's submission. The words upon which Mr. Dastur relies are used in the context of the computation of the deduction under section 80-M, the deduction being a percentage of the dividend income. In the result, the third question must be answered in favour of the Revenue. To sum up, the first question is answered in the negative and in favour of the assessee. The second q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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