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TMI Blog1998 (3) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities below. To a question from the Bench as to the nature of the business of the assessee and how far computers are relevant, the authorised representative pointed out to the observation of the CIT(A) that the computers in the present case were very much in the factory premises itself and they are part of the plant used in appellant s business. We have gone through the contentions of the parties and perused the records. We find that the assessee has not filed any material to ascertain whether computer is part of plant in the case of the assessee or not. We are, therefore, inclined to agree with the authorities below disallowing a sum of Rs. 33,462 as extra shift allowance on computers. 3. The third ground of appeal relates to disallowance of investment allowance and depreciation on the borewell. The assessee s authorised representative pointed out that borewell is a plant and, therefore, the assessee should be allowed investment allowance and also depreciation at the rate of 15 per cent. He further relied on the decision of the Calcutta High Court in the case of CIT vs. Hindustan Motors Ltd. (1988) 69 CTR (Cal) 197 : (1988) 170 ITR 431 (Cal). The learned Departmental Repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer has taken place when there is destruction of property. He also argued that the Madras Bench A of the Tribunal in the aforesaid case has also followed the Madras High Court decision. But the facts of the present case are different. There is no complete destruction of the plant and machinery but there is damage to the plant and machinery which the assessee got repaired. Therefore, the decision of the Tribunal is also not applicable and the question involved in both the cases of the assessee relating to the asst. yr. 1983-84 and the decision of the Madras High Court was whether any capital gain arose out of the insurance claim or not. He further pointed out that in these judgments nowhere the question relating to arising of income has been discussed or upheld. He pointed out to pp. 2 and 3 of the assessment order wherein the AO has clearly upheld the character of such receipt to be a revenue receipt and income chargeable to tax. He further pleaded that the principle of res judicata is not applicable to the income-tax proceedings. 5. We have carefully considered the rival contentions and perused the materials on record. We have gone through the judgment of the Supreme Court cited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpretation because the expression 'receipt' occurring in cl. (3) must necessarily be revenue receipt and not capital receipt. The word 'receipt' must be understood as synonymous with income. The expression 'income' has been defined in s. 2(24) to include capital gains. It is precisely for this reason that proviso (i) to cl. (3) of s. 10 expressly excludes 'capital gains' chargeable under the provisions of s. 45 from the ambit of the said clause. Accordingly we are of the considered opinion that the sum of Rs. 42,967 received as insurance claim by the assessee from the insurance company is a receipt of casual and non-recurring in nature within the meaning of cl. (3) of s. 10. We, therefore, direct the AO accordingly. 7. The seventh ground of appeal relates to the claim of the assessee that the CIT(A) erred in directing computation of relief under s. 80HH of the eligible units after adjusting losses from the other units. The authorised representative of the assessee simply relied on the decision of the Tribunal (A-Bench, Madras) in the case of the assessee dt. 16th June, 1988, in ITA Nos. 1108/Mad/1986 and 1637/Mad/1985 for the asst. yr. 1983-84, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income . In accordance with the scheme of the Act, the income has to be computed. Sec. 2(24) defines income which includes profits and gains. Under s. 2(45), total income has been defined to mean the total amount of income referred to in s. 5, computed in the manner laid down in this Act. Sec. 5 contains the scope of total income which includes all income from whatever source derived which is received or is deemed to be received in India in such year by or on behalf of such person. Sec. 28 of the Act refers to taking of profits and gains of business or profession. The computation has been provided of the income in accordance with the provisions of s. 29, which prescribes that the income referred to in s. 28 shall be computed in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng then this section is applicable. The gross total income which has been referred to in the first part of this section includes the profits and gains derived from an industrial undertaking. Sec. 80AB mentions that the amount of income of the nature as computed in accordance with the provisions of this Act shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income. Sec. 80AB contemplates computation of the income in accordance with the provisions of this Act and thereafter the deduction is to be made under Chapter VI-A. The income which is derived from an industrial undertaking alone is liable to the deduction in s. 80HH. The later part of s. 80HH provides that the deduction equal to 20 per cent from such profits and gains is available to the assessee. The word 'such' refers to the profits and gains which are mentioned in the first part of this section and are included in the gross total income. In other words, from the gross total income of an industrial undertaking, the deduction is available to 20 per cent of such profits and gains in computing the total income. The gross to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 280-O'. Income by way of dividends from a domestic company included in the gross total income would, therefore, obviously be income computed in accordance with the provisions of the Act, that is, after deducting interest on monies borrowed for earning such income. If income by way of dividends from a domestic company computed in accordance with the provisions of the Act is included in the gross total income, or, in other words, forms part of the gross total income, the condition specified in the opening part of sub-s. (1) of s. 80M would be fulfilled and the provision enacted in that sub-section would be attracted. 11. In the aforesaid case, the words 'all such income by way of dividends' was considered to be referring only to the category of income included in the gross total income and also the quantum of income so included and it was considered that what is included in the gross total income would be considered as the income which has to be considered for the purpose of s. 80M. 12. The Madras High Court in the case of CIT vs. Rambal (P) Ltd. (1984) 42 CTR (Mad) 45 : (1988) 169 ITR 50 (Mad) while considering the relief under s. 80-I by taking into consideration the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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