TMI Blog1981 (9) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... t years 1969-70 and 1970-71, assessments were made on March 20, 1971. For the assessment year 1969-70, as against the loss of Rs. 20,050 shown by the assessee, the actual amount arrived at as loss was Rs. 22,650 and the depreciation for that year as determined at Rs. 3,316. Thus, the aggregate deficit for that year was Rs. 25,966. For the assessment year 1970-71, the assessee had shown an income of Rs. 26,580. The ITO determined the income at Rs. 29,584. He set off the deficit of Rs. 25,966 relating to the earlier year and arrived at a net income of Rs. 3,618. It appears that this figure has undergone some modification but that is not really material for our present purpose. The ITO reopened the assessments for these two years. In the rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unabsorbed loss or unabsorbed depreciation, as the case may be. It is this order of the Tribunal that is now challenged in the present common reference for all the four years, namely, 1969-70 to 1972-73. We have already extracted the question which has been referred to this court. Section 80P occurs under Chap. VI-A. The relevant section reads as under: " (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... error in the order of the ITO. He considered that a rebate of 8 per cent. could not have been given on Rs. 8,02,126 which represented the income from business as well as the income under s. 41 (2). According to him, the income taxed under s. 41(2) would not be eligible for the rebate under s. 80E(1) and further the unabsorbed depreciation and development rebate of the earlier years ought to have been set off as against a sum of Rs. 46,319 representing the business income of the assessee for that year. The result was that there was no scope for applying the deduction contemplated under s. 80E. It is the legality of this order which was challenged ultimately before the Supreme Court. The Supreme Court held in the above case that, on construct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... geable on its total income for any assessment year of so much of the amount of income-tax calculated at the average rate of income-tax on the income so included (other than any such income on which no income-tax is payable under the provisions of this Act) as exceeds an amount of twenty-five per cent. thereof : ........" Section 85A was replaced by s. 80M and that was the provision applicable for certain other years. Section 80M, in so far as it is material for our purposes, runs as follows: " Where the gross total income of an assessee being a company includes any income by way of dividends received by it from a domestic company, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Gujarat High Court in CIT v. Gautam Sarabhai [1981] 129 ITR 133, which has considered the question of relief available to the assessee under s. 80T in respect of capital gains. It is not necessary to go into the facts of that case but it is enough to mention that the learned judges have dissented from the view taken by this court in Venkatachalam's case [1979] 120 ITR 688 and have followed the decision in Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (SC). They distinguished the decision in Cloth Traders (P.) Ltd. v. Addl. CIT [1979] 118 ITR 243 (SC). The problem is of course not easy of solution especially having regard to the manner in which these provisions have been drafted and the method of deduction that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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