1990 (5) TMI 231 - HC - Income Tax

Summary

Issues:
1. Assessability of sale proceeds of import entitlements as business income.
2. Allowability of weighted deduction on export promotion expenses.
3. Admissibility of claim for interest payable under the Deferred Payment Scheme.
4. Admissibility of depreciation on a diesel generating set.

Analysis:

Issue 1:
The Tribunal referred whether the sale proceeds of import entitlements amounting to Rs. 2,25,335 were assessable as business income. The Court relied on a previous decision and concluded in favor of the revenue.

Issue 2:
Regarding the weighted deduction under section 35B of the Income-tax Act on export promotion expenses, the Court referred to previous judgments. It held that the export inspection charges and bank charges for negotiation of export bills were not eligible for weighted deduction.

Issue 3:
The Tribunal questioned the admissibility of the claim for interest payable under the Deferred Payment Scheme. The assessee chose not to press this question, and therefore, the Court declined to answer it.

Issue 4:
The final issue was the admissibility of depreciation amounting to Rs. 18,324 on a diesel generating set. The Tribunal considered the facts from a previous year's case and observed that due to a lockout, the assessee could not actively use the generating set. However, the Court noted that passive user of an asset is sufficient for depreciation allowance. It determined that the claim should be allowed as the generating set was still being used in the business of leasing out generating sets.

In conclusion, the Court answered the questions as follows:
- Issue 1: Answered in favor of the revenue.
- Issue 2: Subpart (a) answered in favor of the assessee, and subpart (b) in favor of the revenue.
- Issue 3: Answer declined.
- Issue 4: Answered in favor of the assessee. No order was given regarding costs. The judgment was agreed upon by another judge. The decision was partly in favor of the revenue.