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Interpretation of deduction under section 80C for an individual author. Analysis: The case involved an appeal by an individual, a former Chief Justice of the Madras High Court, against the order of the CIT (Appeals) regarding the deduction under section 80C for the assessment year 1988-89. The assessee claimed a deduction of Rs. 60,000 under section 80C(4)(i) as he was an author, but the Assessing Officer restricted the deduction to Rs. 40,000, citing that the income from royalty on books was minimal compared to the total income. The CIT (Appeals) upheld the restriction. The main contention was whether the assessee, being a recognized author, was entitled to the higher ceiling limit of Rs. 60,000 under section 80C(4)(i). The learned counsel for the assessee argued that the legislative intent behind the amendment to section 80C(4)(i) was to increase the ceiling limit for individuals like authors to Rs. 60,000, irrespective of the income derived from the profession. He relied on a Supreme Court decision to support the argument that subsequent amendments reflect legislative intent. On the other hand, the Departmental Representative contended that the higher ceiling limit should apply only to individuals with substantial income from the recognized profession. He emphasized the need to avoid absurd results in interpreting taxing statutes. The Tribunal acknowledged that the assessee was a well-known author based on previous orders. It noted the deletion of Rule 11A and the direct fixing of ceiling limits in section 80C(4) from the assessment year 1984-85. The Tribunal highlighted that the legislative intent was to remove the income tag for determining the ceiling limit, as evident from the amendments. It concluded that the assessee, being a recognized author, was entitled to the higher ceiling limit of Rs. 60,000 under section 80C(4)(i) and directed the Assessing Officer to re-compute the allowable deduction accordingly. In the final decision, the Tribunal allowed the assessee's appeal, granting the deduction of Rs. 60,000 under section 80C.
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