1999 (12) TMI 5 - HC - Income Tax

New Industrial Undertaking Special Deduction Trust - (1) Whether the Appellate Tribunal is right in law and on facts in allowing the deduction under section 80L to the assessee-trust treating the status as individual? - (2) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 1, 99, 12, 300 being interest paid by the assessee-trust to its beneficiaries? - (3) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 8, 40, 000 made on account of estimate of earned interest at the rate of 12 percent on bank fixed deposits of Rs. 70 lakhs existing in the name of the beneficiaries? - (4) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 6, 49, 726 made on account of interest on deposits amount to Rs. 1.70 crores made by the assessee-trust with Norma Detergent Pvt. Ltd. and on behalf of the beneficiaries? - (5) Whether the Appellate Tribunal is right in law and on facts in allowing the deduction under section 80-I of the Act - we find that there is no merit in the appeal and the appeal stands dismissed.

Issues:
1. Deduction under section 80L for the assessee-trust
2. Deletion of interest paid by the assessee-trust to its beneficiaries
3. Deletion of addition on account of estimate of earned interest on bank fixed deposits
4. Deletion of interest on deposits made by the assessee-trust with a company
5. Allowance of deduction under section 80-I for specific income items

Analysis:
1. The court found that the issue of allowing deduction under section 80L to the assessee-trust treating the status as an individual was already settled in a previous case. Referring to the decision in CIT v. Deepak Family Trust, it was concluded that no substantial question of law arose, and thus, this issue did not need to be referred.

2. Regarding the deletion of the addition of interest paid by the assessee-trust to its beneficiaries, the court relied on the decision in CIT v. Tanvi Sajni Family Trust and found that no substantial question of law arose in this matter as well, hence not requiring a reference.

3. The Tribunal had deleted the addition made on account of an estimate of earned interest on bank fixed deposits after considering the material presented. The court noted that the Tribunal's decision was in favor of the assessee based on previous accepted decisions by the Revenue. Consequently, it was determined that no substantial question of law arose, and therefore, questions 3 and 4 were not referred.

4. The Tribunal had also deleted the addition made on account of interest on deposits with a company. The court upheld the Tribunal's decision, stating that no substantial question of law arose based on the material considered and the previous decisions accepted by the Revenue. Thus, this issue was not referred for further consideration.

5. The court addressed the issue of allowing a deduction under section 80-I for specific income items related to industrial undertakings. The court examined the relevant provisions and submissions made by the counsel for the assessee. It was concluded that the items in question were covered by section 80-I, as the income could be attributed to the activities undertaken by the assessee. The court referenced a previous decision related to similar activities and held that the appeal lacked merit. Consequently, the appeal was dismissed, and no costs were awarded.

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