COMMISSIONER OF INCOME TAX Vs. RANGALAL BAGARIA

JUDGEMENT

(1.) At the instance of the Commissioner of Income-tax, West Bengal-III, the following questions have been referred to this court under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1974-75 :

(2.) The facts are that the assessee made long-term capital gains on the sale of his share in property at 9, Circus Avenue, Calcutta, for Rs. 2,78,250. The assessee also incurred long-term capital loss on sale of certain shares amounting to Rs. 10,266. In addition, it had long-term capital loss brought forward from the assessment year 1966-67 amounting to Rs. 94,675. After adjustment, the net capital gains included in the total income for the year under consideration came to Rs. 1,73,309. The Income-tax Officer allowed deduction under Section 80T on the amount of Rs. 1,73,309.

(3.) The assessee appealed to the Commissioner of Income-tax (Appeals) and contended that it was entitled to deduction under Section 80T on the entire amount of Rs. 2,78,250. It was argued that Section 80T was an independent section and was not subject to any other provisions of the Act. It was next urged that the assessee's gross total income included the sum of Rs. 2,78,250 as income chargeable under the head "Capital gains" and, therefore, by virtue of Clause (b)(i) of Section 80T, the deduction should have been given on the entire amount, and not on the net amount of capital gains that was included in the assessment. The Commissioner of Income-tax (Appeals) agreed with the submissions made on behalf of the assessee and directed the Income-tax Officer to recompute the total income after giving deductions under Section 80T on the amount of Rs. 2,78,250.