Clarification regarding admissibility of Sec 80MM benefits. - Income Tax - 1449/CBDT

INSTRUCTION NO. 1449/CBDT Dated: January 20, 1982 Your attention is invited to para 2(iii) of boards instruction No.580 dated 1-8-78 wherein it was directed that computation of deduction u/s.80 MM should be worked out w.r.t. net income after deduction of expenditure incurred in earning income. The supreme court in its judgment in case of cloth traders delivered on 4-5-79 observed that the amount of deduction(118 ITR 243) should be worked out w.r.t. gross income .sec.80AB inserted by the Finance Act, 1980 provides that the deduction u/s.80 MM should be worked out w.r.t. net income. Sec.80 AB has been made effective from 1-4-81 and not retrospectively. Therefore the judgment of the supreme court that the deduction should be worked out w.r.t. gross income applies to assessments upto and inclusive of assessment year 1980-81. 2. The above may kindly be brought to the notice of all the officers in your charge. 3. The assessing officers may further be directed to rectify u/s.154 the assessments upto and inclusive of assessment year 1980-81 if deduction u/s.80 MM has been granted in any case on the basis of net income. Any appeals/references filed by you on this point may also be withdrawn.