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TMI Blog1982 (2) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,000 separately for the income of his wife included under section 64. The claim is not admissible for the following reasons: 1. In the first instance, computation of total income has to be made in accordance with the provisions of this Act and such 'total income' before allowing deductions under Chapter VI-A is termed the 'gross total income'. 2. In computing the total income, the income from transferred assets as specified in section 64 is also to be included in the hands of the transferor. 3. The question of allowing deduction under section 80L arises only after such computation is made and it is nowhere stated that while taking the income from transferred assets for purposes of computation, deductions under Chapter VI-A have to be separately allowed on incomes so included. 4. In the absence of any specific provision or any ambiguity in interpretation, the deduction has to be allowed only once to the maximum extent permissible. Accordingly, a sum of Rs. 3,000 alone is allowed and not Rs. 6,000 as claimed." 2. Thereafter, the assessee appealed to the AAC and relying on the decision of the Appellate Tribunal Madras Bench 'C' in P.N. Ramaswamy v. ITO [IT Appeal No. 2172 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1967 section 80L, as introduced, provided for deduction from the gross total income of dividend income where it did not exceed Rs. 500. With effect from 1-4-1969, the section was amended to provide for deduction from the gross total income of an amount of dividend income up to Rs. 500. With effect from 1-4-1970 the exclusion of dividend income from the gross total income was permissible up to the amount of Rs. 1,000. With effect from 1-4-1971 further deductions were provided in section 80L and apart from dividends, where the gross total income of an assessee included any income by way of interest on deposits with a banking company, such interest income was also excludible up to a limit of Rs. 3,000 in the aggregate together with other items deductible under section 80L. 6. A thread which runs uninterrupted right from the inception when section 80L was introduced and up to the current assessment year when section 80L remains in substantially a similar form as modified with effect from 1-4-1972, is that a deduction is to be made "where the gross total income of an assessee includes any income by way of" the stipulated varieties. 7. This takes us to the concept of "gross total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be included. The learned departmental representative, on the other hand, submitted that under the provisions of section 64 in computing the total income of an individual there shall be included all such income that arises directly or indirectly to the spouse out of the transferred assets. The term "all income", he urged, would mean the gross income from the transferred assets. After inclusion of the gross income appropriate deduction permissible to a particular individual-assessee in whose case the gross income is included would have to be allowed and, hence, he stated that deduction under section 80L of Rs. 3,000 could be allowed only once i.e., while making the assessment after including the income under section 64. A reference was made in respect of the proposition to the decision of the Supreme Court in the case of Cloth Traders (P.) Ltd. v. Addl. CIT [1979] 118 ITR 243. Reference was also made to the decision of the Supreme Court in the case of Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84, a decision which has been noticed by the Ahmedabad Bench of the Tribunal in the case relied on behalf of the revenue. 8. We have set out the history of the intr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er VI-A, in which falls section 80L, as far as wife's income from transferred assets is concerned stands ruled out. Hence, we have got the gross total income which includes the total income computed in accordance with the provisions of the Act before allowing deduction under Chapter VI-A of incomes taxable in the hands of the husband as well as income from assets transferred to the wife by the husband. Thereafter, alone the provisions of section 80L come into play. From such gross total income, becomes permissible, deduction under section 80L, and the deduction permissible is only a maximum amount of Rs. 3,000. The question of giving a separate deduction of Rs. 3,000 in the hands of the assessee's wife before aggregating the income from transferred assets does not arise. 9. By not granting a deduction of Rs. 3,000 in the hands of the assessee's wife from interest from transferred assets the concept of real income is also not violated. The deduction given of Rs. 3,000 under section 80L is only a statutory deduction on certain conditions being fulfilled and this does not affect the concept of what would be real income. 10. For the aforesaid reasons, we would come to the conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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