- (1.) THE Tribunal, Jaipur has referred the following question for the opinion of this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the deduction under s. 80P of the IT Act should be allowed before set-off of unabsorbed losses of earlier years ?"
(2.) IT is agreed by the learned counsel for the parties that the controversy involved in the instant reference stands concluded by the decision of the apex Court in CIT vs. Kotagiri Industrial Co- operative Tea Factory Ltd. (1997) 139 CTR (SC) 359 : (1997) 224 ITR 604 (SC) as such, the question deserves to be answered in favour of the Revenue and against the assessee. The respondent-assessee Ganganagar Sahkari Spinning Mills Ltd., Hanumangarh is a co- operative society. The assessee initially filed its return on 29th Oct., 1990, declaring loss. On 17th Oct., 1992, the return was revised by reducing the loss to a sum of Rs. 4,78,72,532 against the sum of Rs. 5,38,73,220 in the original return. The assessee claimed deduction under s. 80P(2)(d) of Rs. 2,54,081 being interest received by it from the co-operative bank. This claim was disallowed by the AO for the reason that the assessee did not have positive gross total income to make any claim for deduction under s. 80P(2)(d). The CIT(A) allowed the appeal of the assessee and it was stated by the CIT(A) in his order that each year is a separate accounting entity and, accordingly, it is the gross total income of each year, which is relevant for the purpose of deduction and allowance of that year. It was also observed that gross total income for the year was Rs. 39,68,633 and it resulted into a negative figure only after adjustment of brought forward losses. The Tribunal held that the finding recorded by the CIT(A) that the assessment has been made on positive income, was correct. At this stage, it would be convenient to extract s. 80P(2)(d) which reads thus: "Deduction in respect of income of co-operative societies.-- (1) (2) The sums referred to in sub-s. (1) shall be the following, namely:-- (a) to (c) (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income;" For the purposes of Chapter VI-A, the expression `gross total income' is defined in cl. (5) of s. 80B in the following terms : "(5) `gross total income' means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter." The apex Court after reading the relevant provisions stated above, held as follows : "If s. 80P(1) is read with the definition of the expression `gross total income' contained in s. 80B (5), it has to be held that for the purpose of making deduction under s. 80P, it is necessary to first determine the gross total income in accordance with the other provisions of the Act. This means that for the purposes of the present case, the gross total income must be determined by setting off against the income the business losses of the earlier years as required under s. 72 of the Act." The apex Court further observed : "The principle of statutory construction invoked by Mrs. Ramachandran has no application in construing the expression `gross total income' in sub-s. (1) of s. 80P. In view of the express provision defining the said expression in s. 80B(5) for the purpose of Chapter VI-A, there is no scope for construing the said expression differently in s. 80P."
(3.) THUS, the question referred stands answered by the decision of the apex Court referred to above. Consequently, the Reference is answered in favour of the Revenue and against the assessee.;