The Commissioner Of Income Tax v. Vasant J. Sheth (Huf

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICGTION INCOME TAX REFERENCE NO. 94 of 1989 The Commissioner of Income Tax ... Applicant. vs. Vasant J. Sheth (HUF) ..... Respondent Mr. A. N. Kotangle for Applicant. Mr. S. J. Mehta for Respondent CORAM: V. C. DAGAAND A. S. AGUIAR JJ. Date: 4[th] July, 2005. P. C. : 1. By this reference under section 256(1) of the Income-tax Act theTribunal has referred the following question of law for opinion at theinstance of the Revenue: (1) Whether on the facts and in the circumstances of the case,the Appellate Tribunal was justified in holding that the businessloss should not be set off first against the dividend income or thedividend income and the interest income and the interestincome and thereafter against the long term capital gains beforedetermining whether the assessee is entitled to any deductionsunder section 80K and /or 80L and what should be the 2 deduction under section 80T of the Income Tax Act 1961.” 2. Counsel for both the sides submit that the above question has beencovered by the decision of the Apex court in the case ofCommissioner of Income Tax vs. V. Venkatachalam., reported in[1993] 201 ITR 737 (S.C), wherein the Apex court held that (i) thatthe words “such income” in the main part of section 80T meant andreferred to the capital gains and not the total income of the assessee.(ii) that the deduction provided for in section 80T had to be made outof the capital gains which, in this case, amounted to Rs.1,02,740/-and no question could arise of the business loss being set off againstthis amount of capital gains. Following the above said dictum laid bythe Apex Court, the question referred to is answered in theaffirmative that is in favour of the assessee and against the Revenue.This reference is disposed of accordingly with no order as to costs. (V. C. DAGA J. ) -x- (A. S. AGUIAR J.)