CIT vs. J. B. Boda & Co.P. Ltd (Bombay High Court)

DATE: October 18, 2010 (Date of pronouncement)
DATE: March 3, 2015 (Date of publication)
AY: -
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Chapter VI-A deductions are not limited to the business profits but are available to the extent of the Gross Total Income

The AO determined the deduction u/s 80-O at Rs. 1,29,41,830. However, though the gross total income was higher, he held that the deduction had to be confined to the extent of business income of Rs. 69,70,127. This was reversed by the Tribunal. On appeal by the department to the High Court HELD dismissing the appeal:

The only question sought to be canvassed is that out of these deductions the admissible deduction under section 80-O ought to be limited to the extent of Rs.69,70,127 which represents business income. In other words, the income from interest and dividend shall not form part of the gross total income as defined under section 80B(5) of the Act. The submission is misconceived. If one turns to the definition of the “gross total income” under section 80B(5), it reads as under:

“80B(5) “gross total income” means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter.”

Considering the definition of the gross total income, it is difficult to hold that the interest income and the dividend income would not form part of the gross total income computed in accordance with the provisions of the Act. The view taken by the Tribunal, in our considered view, is in consonance with what is stated herein. No substantial question of law is involved. In the result, appeal is dismissed in limine with no order as to costs.

Note: The same view has been taken by the Bombay High Court in the context of s. 80-IA in CIT vs. Eskay Knit & Tridoss Labs. Though all three judgements are old, they are not reported so far

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