TMI Blog1978 (3) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... ues was not an allowable deduction in the computation of total income? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that, in view of the computation of loss in the assessment, the assessee was not entitled to deduction under section 80M of the Income-tax Act, 1961 ?" The facts found and/or admitted are, inter alia, that in its assessment to income-tax for the assessment year 1969-70 (the previous year ending on 31st March, 1969) a sum of Rs. 2,50,790 was claimed by the assessee as a deduction in the computation of the assessee's business income. This represented interest paid to the income-tax department on account of delayed payment of tax dues. It was contended that since the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But such deduction including deduction under section 80M had to be allowed against total income and not only against the dividend income. The scheme of Chapter VIA was that the deductions were limited to the gross total income and not meant to be carried forward in the succeeding assessment years. The contentions of the assessee were, therefore, rejected. Mr. R. N. Bajoria, the learned counsel for the assessee, cited before us a decision of the Supreme Court in Indian Aluminium Co. Ltd. v. Commissioner of Income-tax [1972] 84 ITR 735, where the Supreme Court held that wealth-tax paid by the assessee, a trading company, on assets held by it for the purpose of its business, was deductible as a business expense in computing the assessee's in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. The loss did not spring directly from the carrying on of the assessee's business and the liability was not incurred in the running of the business. The liability was imposed by the statute to which all assets were exposed, whether they carried on business or not. On question No. 2, Mr. Sengupta drew our attention to the relevant statutory provisions as follows : "80A. Deductions to be made in computing total income.-(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 80VV. (2) The aggregate amount of the deductions under this Chapter shall not, in any case, exceed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint, we are unable to accept the contentions of the assessee. We answer the question No. 1 in the affirmative and in favour of the revenue. As to question No. 2, it appears to us that the statutory provisions referred to above conclude the controversy. Undoubtedly, the assessee is entitled to deduction under section 80M but the amount of deductions cannot exceed its gross total income under section 80A. Such gross total income means, the total income computed in accordance with the provisions of the Act before making any deductions under Chapter VIA or deductions in respect of annuity deposit paid under section 280-O. In the instant case such gross total income is found to be a net loss in the year concerned, because of the losses suffer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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