SUHAS CHANDRA SEN, J.

( 1 ) THE Tribunal has referred the following question of law to this court, under Section 256 (1) of the Income-tax An. 1961 :"whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the deduction under Section 80t of the Income-tax Act, 1961, should have been computed by reference to the amount of capital gains as reduced by loss under the head "capital gains" brought forward from earlier years and not by reference to the amount of capital gains arising during the relevant previous year without any such deduction ?"

( 2 ) THE year of assessment is 1972-73 for which the relevant accounting period was the year ending on October 17, 1971 (Dewali 2028 S. Y. ). It appears from the statement of case that the assessee is a Hindu undivided family. For this assessment year, the assessee had, amongst, other incomes, income from capital gains on sale of property at 30, Tara Chand Dutta Street, Calcutta, amounting to Rs. 1,89,000. The Income-tax Officer set off against this income from capital gains of Rs. 1,89,000 the earlier year's loss under the head "income from capital gains" brought forward amounting to Rs. 1,14,500 and on the balance amount of Rs. 74,500, the Income-tax Officer allowed deduction under Section 80t of Rs. 5,000 on the first Rs. 5,000 and 35% of the balance.

( 3 ) THE assessee went up in appeal before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner, while not accepting some of the claims in the appeal before him, accepted the assessee's claim that the deduction under Section 80t should be worked out on the capital gains for this year without first setting off the losses under the head "capital gains" brought forward from the earlier years.

( 4 ) THE Revenue appealed to the Tribunal against the order of the Appellate Assistant Commissioner. The Tribunal held that the deduction under Section 80t should have been worked out after setting off the loss brought forward from the earlier years and on that portion of the amount of the long-term capital gains which were included in the gross total income. The order of the Appellate Assistant Commissioner was reversed and the order passed by the Income-tax Officer was restored.

( 5 ) MR. Bajoria, on behalf of the assessee, M/s. Gouri Prasad Goenka, has contended that the computation of capital gain must be made without making any deduction on account of unabsorbed loss on long-term capital gains of the earlier years. His contention is that although the Supreme Court in the case of Distributors (Baroda) P. Ltd. v. Union of India, has overruled its decision in the case of Cloth Traders (P.) Ltd. v. Addl. CIT and has affirmed its earlier judgment in the case of Cambay Electric Supply Industrial Co. Ltd. v. CIT, a new avenue of thought has been opened up by the judgment in the case of CIT v. Canara Workshops P. Ltd. Following the ratio laid down in that judgment, it must be held that in computing capital gains arising out of sale or transfer of long-term capital assets, the loss incurred by the assessee in the earlier years could not be set off against profits arising out of sale of capital assets in the relevant year of account. It was argued that the profit has arisen because of sale of an asset and this transaction was quite independent of the transactions and the asset in which the loss was incurred. If this ratio laid down in the case of CIT v. Canara Workshops P. Ltd. , is followed, then the assessee is entitled to succeed in this case.

( 6 ) I am unable to uphold this contention. The earlier controversy as to how the relief in the group of sections in Chapter VI-A would be made was resolved by the judgment of the Supreme Court in the case of Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120. Chapter VI-A comprises Sections 80a to 80vv. Section 80a provides that in computing the total income of an assessee, there shall be allowed from his gross total i

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