1984 (1) TMI 97 - AT - Income Tax

Summary

Issues:
- Interpretation of section 80L of the Income-tax Act, 1961
- Classification of the assessee as an AOP or an individual for the purpose of relief under section 80L
- Application of the decision in Trustees of Gordhandas Govindram Family Charity Trust case
- Dispute regarding the territorial applicability of relief under section 80L(1)(c)

Analysis:
The appeal before the Appellate Tribunal ITAT BOMBAY-D involved the interpretation of section 80L of the Income-tax Act, 1961, specifically regarding the classification of the assessee as an AOP or an individual for the purpose of claiming relief under section 80L. The department filed the appeal against the order of the AAC, which had allowed relief under section 80L to the assessee, a trust assessed through its trustees in the status of an AOP. The primary contention was whether the assessee should be considered as an individual or an AOP for the purpose of claiming relief under section 80L.

The assessee claimed that it should be allowed relief under section 80L as an individual, relying on the decision in Trustees of Gordhandas Govindram Family Charity Trust case, which held that the word 'individual' includes 'individuals'. The AAC accepted this argument and directed the ITO to allow relief under section 80L to the assessee. The department, represented by Mrs. Vijayalaxmi, argued that the AAC erred in applying the decision in Deghamwala Estates case and that the AOP referred to in section 80L(1)(c) should belong to specific territories mentioned in that sub-section.

On the other hand, the assessee's representative, Shri H.S. Parekh, supported the order of the AAC, contending that the assessee should be treated as an individual based on the Trustees of Gordhandas Govindram Family Charity Trust case. He also argued that even if the assessee is considered an AOP as per section 164(2), it would still be entitled to relief under section 80L(1)(c). He emphasized that the words 'association of persons' in section 80L(1)(c) should be read independently from the qualifications related to community of property in specific territories.

The Tribunal, after considering the arguments of both parties and the relevant case law, upheld the order of the AAC. The Tribunal noted that the status of the assessee had been correctly taken as an AOP in the assessment order, in accordance with section 164(2). It further clarified that the qualifications mentioned in section 80L(1)(c) apply to 'body of individuals' and not 'association of persons', allowing the assessee to claim relief even as an AOP under section 80L(1)(c). Therefore, the appeal filed by the department was dismissed, affirming the decision of the AAC to grant relief under section 80L to the assessee.