2005 (2) TMI 24

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..... s right in granting benefit under section 80TT on the net amount of Rs. 10,80,000
Judge(s) : A. M. SAPRE., ASHOK KUMAR TIWARI. JUDGMENT The judgment of the court was delivered by A. M. Sapre J.-This is an income-tax reference made at the instance of the assessee by the Tribunal under section 256(1) of the Income-tax Act, 1961, in R.A. No. 108/Ind/91 which arises out of an appellate order dated May 5, 1991, passed by the Tribunal in I.T.A. No. 701/Ind/85 to answer the following question of law: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in holding that the deduction under section 80TT is admissible on the net amount of prize money of Rs. 10,80,000 and not on the gross lottery prize of .....

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..... not on the net income of Rs. 10,80,000. It is against this view of the Commissioner of Income-tax (Appeals) that the Commissioner of Income-tax filed an appeal to the Tribunal. The Tribunal while allowing the appeal, filed by the Commissioner of Income-tax held that the assessee is entitled to claim/calculate deduction under section 80TT of the Act on the net income of the assessee, i.e., Rs. 10,80,000 after deducting the commission paid to the agent and not on Rs. 12,00,000. It is against this view of the Tribunal, the assessee prayed for reference to this court under section 256(1) of the Act. The Tribunal accepted the prayer so made by the assessee and made the reference on the question so formulated supra to this court for answering th .....

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..... ith effect from April 1, 1981. In other words, reading the interpretation placed by the Supreme Court in the case of Distributors (Baroda) P. Ltd. [1985] 155 ITR 120 of section 80M read with the language employed in section 80AB, we have no hesitation in holding that the assessee is entitled to claim deduction under section 80TT of the Act on the net income and not on the gross one. In this view of the matter, the net income in the case in hand was worked out to Rs. 10,80,000 after deducting the agent's commission from the gross total amount of Rs. 12,00,000. So the calculation of computation has to be made under section 80TT taking Rs. 10,80,000 to be the net income and accordingly, benefit has to be worked out in favour of the assessee. .....

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