Law:

Section:

Section 80MM [omitted w.e.f. 1-4-1984] of the Income-tax Act, 1961 - Deductions - In respect of royalties, etc., received from any concern in India - Assessment yean 1972-73,1973-74 and 1974-75 - Whether relief admissible to assessee under section 80MM was to be allowed on net income and not on gross income - Held, yes FACTS The Tribunal held that the relief admissible to the assessee under section 80MM was required to be restricted to the net income and was not admissible with reference to the actual amount of income by way of consulting fees received. On reference: HELD On the basis of the interpretation of the language used in section 80MM the relief admissible to the assessee under section 80MM was to be allowed on the net income and not on the gross income. The order of the Tribunal was, therefore, upheld. CASES REFERRED TO Distributors ( Baroda) ( P.) Ltd v. Union of India [1985] 155 ITR 120 (SC), CIT v. Banque National de Paris [IT Reference No. 597 of 1976, dated 19-7-1990], CIT v. Madras Motor & General Insurance Co. Ltd [1986] 159 ITR 601 (Mad), CIT v. K.S. Narayanan [1986]159 ITR 618 (Mad.), Pilani Investment Corpn. Ltd v. CIT [1987] 165 ITR 138 (Cal.), CIT v. P.K. Jhaveri [1990] 181 ITR 79 (SC) andCloth Traders (P.) Ltd v. Addl CIT [1979] 118 ITR 243 (SC). Dilip Dwarkadas and N.A. Dalvi for the Applicant Dr. V. Balsubra- manian, Pradeep S. Jetly and K.C. Sldhwa for the Respondent JUDGMENT Sugla, J.-The reference is at the instance of the assessee. The assessment years involved are 1972-73, 1973-74 and 1974-75. By its order dated 3-2-1976 under section 256(1) of the Income-tax Act, 1961 ('the Act"), the Tribunal has referred to this Court the following question of law: "Whether, on the facts and in the circumstances of the case, and on a correct interpretation of the provisions of sec. 80MM, the Tribunal erred in law in holding that the relief admissible to the assessee under that section is required to be restricted to the net income and not with reference to the actual amount of income by way of consulting fees received, amount to Rs. 3,27,350 (Assessment year 1972-73), Rs. 4,99,170 (Assessment year 1973-74) and Rs. 67,448 (Assessment year…

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