R.K.Agrawal, J. - (1.) Income Tax Reference No. 153 of 1987 relates to Assessment Year 1971-72 wherein the Income Tax Appellate Tribunal, New Delhi has referred the following question of law under Section 256(1) of the Income Tax Act, 1961, hereinafter referred to as the Act, for opinion to this Court:" Whether, on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was legally correct in holding that deduction under Section 80-P(2)(d) of the Income-tax Act, 1961 is allowable on the gross amount of interest ignoring the provisions of section 80-B(5) which defines the term 'gross total income' in such a way that it could only mean net income before making any deduction under Chapter VI-A or Section 280-O and without applying the provisions of Section 64?" whereas Income Tax Reference No.29 of 1987 relates to the Assessment Year 1979-80 wherein the Income-tax Appellate Tribunal, New Delhi has referred the following question of law under Section 256(1) of the Act' for opinion to this Court: "Whether, on the facts and in the circumstances of the case, the I.T.A.T. was legally correct in holding that deduction under Section 80P(2)(d) of the I.T. Act, 1961 was allowable on the gross amount of income from interest in the asstt. Year 1979-80?"
(2.) Even though two questions have been worded differently the controversy is the same as to whether the deduction under Section 80P(2)(d) of the Act was allowable on the gross amount of income from interest or the net amount.
(3.) Briefly stated the facts giving rise to the present References are as follows :- The respondent is a Cooperative Society. For the previous years relevant to the Assessment Years 1971-72 and 1979-80 the respondent had claimed deduction under Section 80P(2)(d) of the Act on the gross amount of interest amounting to Rs. 1,28,948/-and Rs.2,18,557/-respectively. The Income Tax Officer had found that during the Assessment Year 1971-72 it had to pay a sum of Rs.3,50,580/- as interest on loan taken by it from various bodies. During the Assessment Year 1979-80 the Income Tax Officer found that payment of interest exceeded the receipts and, therefore, no separate deduction under Section 80P(2)(d) of the Act can be given. In the appeal preferred by the respondents the deduction has been allowed on the gross amount. The Revenue's appeal before the Tribunal has failed.;