9911796707
TMI Blog2000 (7) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... pts of income from property, interest on loans and advances made to staffs, interest collected on belated refund of advance made to India Cement Company and Madras Cement and interest on State Bank account with banks, are exempt. These receipts cannot be said to be derived from lofting of goods owners or warehouses on storage, processing or facilitating the marketing of commodities. For the assessment years 1983-84 and 1984-85, the decision rendered on 5-4-1991 in ITA Nos. 3010 and 3011 /Mad./89 by the Tribunal in assessee's own case have been appealed against and that the issues have not become so far final and conclusive. Hence, the orders of the CIT (Appeals) are contrary to the law and facts of the case. Reliance is also placed on the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefit of the Tribunal which delivered its decision in the case of the assessee herein on 5-4-1991, Consequently, the latest decision of the Supreme Court reported in Orissa State Warehousing Corpn.'s case squarely applies to the instant cases. 4.2 The words "derived from" have to be given only restricted meaning and not wider meaning. This view of ours also gets strength from the decision in the case of CIT v. Pandian Chemicals Ltd [1998] 233 ITR 497 (Mad.). The jurisdictional High Court has followed the decision of the Apex Court in CIT v. P.J. Chemicals Ltd. [1994] 210 ITR 830 and dealt with the expression "derived from". The expression "derived from" should be given a restricted meaning and whenever the Legislature wants to give a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en derived from the industrial undertaking. The immediate source of interest was the deposit itself. In other words, the immediate and effective source of the interest was the deposit and not the industrial undertaking. The fact that the amount was assessable as business income would not be sufficient to hold that the interest income was derived from the actual conduct of the business of the industrial undertaking. Hence, the interest could not be treated as income derived from an industrial undertaking for purposes of relief under section 80HH. 4.3 The question whether interest on fixed deposits could be treated as part of the income eligible for exemption or deduction came up before the Supreme Court in the case of Orissa State Warehous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rise. Where the deposits have close nexus with business as from security deposit for power connection or margin money for getting loan for the industrial undertaking, the interest should merit deduction. In the case of Orissa State Warehousing Corpn., the Supreme Court has held that the income from the fixed deposits in the hands of the company claiming total exemption as one engaged in letting out warehouse would not be exempt. The difference between the language "attributable to" in some provisions and "derived from" in some others have led the authorities to believe that even in the case of close nexus as in the case of security deposits or margin money, relief may not be available to such income where the language used is "derived from" ..... X X X X Extracts X X X X X X X X Extracts X X X X
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