Deduction u/s.80-O of Income-tax Act, 1961 : Amount allowable is restricted to the total income and not to the income computed under the head business.

[CIT v. M/s. J. B. Boda &
Co. P. Ltd. (Bom.), ITA No. 3224 of 2009 dated 18-10-2010.]

The Assessing Officer
determined the amount eligible for deduction u/s.80-O at Rs. 1,29,41,830 being
50% of the income so received or brought into India. However, he restricted the
deduction u/s.80-O to
Rs. 69,70,000, being the total income under the head ‘Business’, on the ground
that allowing further deduction would amount to allowing the deduction from
income under other heads. The Tribunal found that the gross total income
exceeded Rs. 1,29,41,830 and therefore allowed the full claim of the assessee.

On appeal by the Revenue,
the Bombay High Court upheld the decision of the Tribunal and held as under :

“(i) The only question
sought to be canvassed is that out of these deductions the admissible
deduction u/s.80-O ought to be limited to the extent of
Rs. 69,70,127 which represents business income. In other words, income from
interest and dividend shall not form part of the gross total income as defined
u/s.80B(5) of the Act.

(ii) 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.

(iii) The view taken by
the Tribunal, in our considered view, is in consonance with what is stated
herein.”