Judgment :- Viswanatha Iyer, J. These are references at the instance of the revenue. The assessee in all these cases is the same, namely the Kerala Financial Corporation Limited. The question referred is whether, on the facts and in the circumstances of the case, the assessee is entitled to deduction under S.36(1) (vhi) of the Income Tax Act, 1961, on the total income before making any deduction under S.36(1)(viii)? 2. This question is really concluded against the revenue by the decisions in the assessee 's own cases in I.T.R. Nos. 33 and 34 of 1985 and I.T.R. No. 68 of 1989 pertaining to the assessment years 1978-79,1977-78 and 1979-80. In answering those references this court had followed the decision in Kerala State Industrial Development Corporation Ltd.v. C.I.T. (1989)180 ITR 323 as also the decision in I.T.R.Nos. 205 to 208 of 1984 (subsequently reported in 182ITR 67). The decision in the first of these cases, namely Kerala State Industrial Development Corporation's case, 180 ITR 323 was approved and followed in C./.T. v. Kerala State Industrial Development Corporation Ltd., (1990) 182 ITR 67, after overruling an attempt made by the revenue for a reconsideration of the earlier decision in view, of the decision of the Supreme Court in Cambay Electric Supply Industrial Co. v. C.I.T (1978) ll3 I.T.R. page 84. This court dealt with the matter in the light of the decision in Cambay Electric Supply Industrial Company's case and held that the decision in 180 ITR 323 did not require reconsideration. On the other hand this court noted that subsequent to the earlier decision, the High Court of Madhya Pradesh had also rendered a decision in C.I.T. v. Madhya Pradesh Audyoglk Vikas Nigam Ltd. (No. 1) (1989) 178 ITR 177 in which it had taken the same view as that taken in 180 ITR 323. In rendering the earlier decision, this court followed the decisions of the Patna High Court C.I.T.v. Bihar State Financial Corporation (1983)142 ITR 518, CIT v. Bihar State Financial Corporation (1983) 142 ITR 519 and CIT v. Bihar State Financial Corporation (186) 159 ITR 275. 3. In rendering the earlier decision, this court followed the decisions of the Patna High Court C.I.T.v. Bihar State Financial Corporation (1983)142 ITR 518, CIT v. Bihar State Financial Corporation (1983) 142 ITR 519 and CIT v. Bihar State Financial Corporation (186) 159 ITR 275. 3. But, according to counsel for the revenue, the decision of this court requires reconsideration in the light of the decision in Cambay Electric Supply Industrial Company's case, ll3 ITR 84 and also in the light of the decision of the High Court of Karnataka in Karnataka State Financial Corporation v. CIT, (1988) 174 206 besides with reference to the statement of objects and reasons to the Finance Act, 1985. So far as' the first ground is concerned, that the decision in the Cambay, Electric Supply Industrial Company's case justifies a further look, to the question, it does not appeal to us. In fact the first attempt made by the revenue to reconsider the decision in 180 ITR 323 was with reference to this case and this court dealt with the matter afresh with reference to the contentions raised by the revenue, but reaffirmed its earlier decision till 180 ITR 323 in the subsequent decision in 182 ITR 67. We are in agreement with the reasoning in 182 ITR 67 and do not find any reason to reconsider the earlier decision in the light of the Cambay Electric Supply Industrial Company's case. 4-. Counsel for the revenue very staunchly pressed for our acceptance the contentions based on the objects and reasons to the Finance Act, 1985 by which S.36(1)(viii) of the Act was amended by providing specifically that the deduction is to be 40% of the total income before making any deduction under S.36(1)(vhi) and Chapter VIA. The inference attempted to be drawn is that the law was otherwise till 1-4-1985 when the amendment' came into force and therefore the deduction under S.36(1)(vhi) has to be on the amount after deduction of the said amount from the total income, but without making the deductions under chapter VI-A. This view is in accord with the decision of the Karjaataka High Court in 174 ITR 206. This matter was again the subject of consideration by the men court of Gujarat in CIT v. Gujarat State Financial Corporation. (1992) 196 ITR 822. This matter was again the subject of consideration by the men court of Gujarat in CIT v. Gujarat State Financial Corporation. (1992) 196 ITR 822. The court considered both the Karnataka decision as well as the inference to be drawn from the objects and reasons to the Finance Act, 1985. After an elaborate consideration of the point the Bench refused to accept the Karnataka decision as correct besides holding that the Finance Act, 1985 was clarificatory and not amendatory. The Bench observed as follows: "The opening part of S.2 which contains various definitions clearly provides that, unless the context otherwise requires, different words and expressions will have the meanings given in that section. Definition of "total income" in S.2(45) has to be given the meaning as defined unless the context otherwise requires. Now, when we come to S.360)(viii), it is not possible to read the expression "total income" used therein to mean total income computed in accordance with the provisions contained in Ss.30 to 43A, as provided in S.29, so as also to take into account deductions admissible under S.36(1)(vhi). What we have to bear in mind is that, when we come to S.36(1)(vhi), deduction under that provision has not been worked out and, therefore there is no question of applying the requisite percentage to the total income as reduced by such deduction for the purpose of working out the admissible deduction under that provision Since S.36(1)(vhi) itself provides that the total income for the purpose of the said provision is total income before the deduction under Chapter VI-A, it would mean that, for the purpose of working out deduction under that provision, the total income would be the total income before deduction (1) under Chap. VI-A and (2) under that provision, (section 36(1)(viii)). It may also be mentioned here that, what was implicit in S.36(1)(vhi) has now been made explicit by subsequent amendment of the said clause (vhi) with effect from April 1,1985, by which it was specifically provided that total income for the purpose of applying the requisite percentage is total income before any deduction under that clause and Chapter VI-A". After referring to the decision of the Karnataka High Court the Bench proceeded to observe as follows: "The decision of the Karnataka High Court, no doubt, fully supports the view canvassed on behalf of the Revenue, but, with respect, we find ourselves unable to agree with it. After referring to the decision of the Karnataka High Court the Bench proceeded to observe as follows: "The decision of the Karnataka High Court, no doubt, fully supports the view canvassed on behalf of the Revenue, but, with respect, we find ourselves unable to agree with it. As already observed above, for the purpose of working out deduction under S.36(1)(vhi) total income can only mean total income computed after taking into consideration deductions admissible under all the provisions except S.36(1)(vhi) and Chapter VI-A. From the formula adopted by the Tribunal which was approved by the Karnataka High Court, it is clear that, initially deduct ion under S.36(1)(vhi) was worked out by applying the appropriate percentage to total income computed before deduction under that clause and Chapter VI-A. Once that is done, as already observed, the provision gets exhausted and there is no question of again reducing the total income by such deduction and again applying the requisite or appropriate percentage for working out the admissible deduction. There is no justification for making the deduction twice over. The total income to which the appropriate percentage is to be applied to work out deduction under S.36(1)(viii) would obviously mean the total income before such deduction. Therefore, the expression "total income", in the context in which it is used in S.36(1)(viii), can only mean to income before deduction under that clause and Chapter VI-A. In our opinion, the provision is very clear and there is no need to evolve, or apply any formula. Therefore, in our opinion, deduction under S.36(1) (vhi) has to be worked out by applying the proper percentage to the total income computed before making any deduction under that clause and Chapter VI-A." 5. We are in entire agreement with the view so expressed by the Gujarat High Court. The definition of total income in S.2(45) being subject to the context it has to be read in S.36(1)(viii) as relating to the total income without making the deduction under S.36j(1)(viii) as well. That seems to be logical in the context in which the provision occurs. The matter has been dealt with exhaustively by the Gujarat High Court. We are in agreement with their view and the reasoning adopted by them. 6. In this view of the matter the decisions of this court do not require reconsideration as contended by counsel for the revenue. The matter has been dealt with exhaustively by the Gujarat High Court. We are in agreement with their view and the reasoning adopted by them. 6. In this view of the matter the decisions of this court do not require reconsideration as contended by counsel for the revenue. We, are in agreement with those decisions which themselves are based on the decisions of Patna and Madhya Pradesh High Courts, where the matter has been discussed in full. 7. These references arc therefore answered in the affirmative, that is against the revenue and in favour of the assessee. A copy of this judgment under the seal of this court and the signature of the Registrar, will be forwarded to the Income Tax appellate Tribunal, Cochin Bench for information and compliance.