Law: Income Tax Act, 1961

Section: 80B(5),80-P

Income-tax----Special deduction---Cooperative society---Deduction is from gross total income determined in accordance with other provisions of Act---Unabsorbed, losses of earlier years to be set off before allowing deduction un S.80-P---Indian Income Tax Act, 1961, Ss.80-B(5) & 80-P---[CIT v Katpadi Cooperative Timber Works Ltd. (1982) 135 ITR 287 (Mad.) impliedly overruled]. In view of the express provision defining the expression "gross total income" in clause (5) of S.80-B of the Income Tax Act, 1961, for the purpose of Chapter VI-A of the Act, it is necessary, for the purpose of making deduction under S.80-P of the Act, to determine the gross to income in accordance with the other provisions of the Act. This means that the gross total income must be determined by setting off against the income the business losses of the earlier years as required under section 72 of t Act, before allowing deduction under section 80-P: Held, accordingly, reversing the decision of the High Court that before considering the matter of deduction under section 80-P(2 j, t Income-tax Officer had rightly set off the carried forward losses of the earlier years in accordance with section 72 of the Act and, finding that the s4i losses exceeded the income, had rightly not allowed any deduction and, section 80-P(2). . Distributors (Baroda) (Pvt.) Ltd. v. Union of India (1985) 155 ITR 120 (SC) and H. H. Sir Rama Varma v. CIT (1994) 205 ITR 433 (SC) rel. CIT v. Katpadi Cooperative Timber Works Ltd. (1982) 135 IT 287 (Mad.) impliedly overruled. Broach District Cooperative Cotton Sales, Ginning and Pressing Society Ltd. v. CIT (1989) 177 ITR 418 (SC): Cambay Electric Supply Industrial Co. Ltd. v. CIT (1978) 113 ITR 84 (SC); CIT v. Venkatachalai (V.) (1979) 120 ITR 688 (Mad.); CIT v Venkatuchalam 1993) 201 1Tn 737 (SC) and Cloth Traders (P.) Ltd. v. Addl. CIT (1979) 118 ITR 243 (SC) ref. JUDGMENT This appeal, by certificate, is directed against the judgment of the Madras High Court, dated January 22, 1982, in Tax Case No.407 of 1977. The Kotagiri Industrial Cooperative Tea Factory Ltd., the respondent (hereinafter referred to as "the assessee") is a cooperative society. It carries on…

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