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TMI Blog2005 (2) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... in the process of printing of continuous and non-continuous stationery required by corporate sectors, such as printing of prospectus, share certificate, share issue forms, dividend/interest warrants, mass stationery and computer stationery. In addition to the above, the company was also having income by way of sale of waste paper, kasar, courier charges, labour income, misc. income during the year. The assessee has claimed deduction under section 80-I of the Act on all of these incomes. The Assessing Officer was satisfied with the assessee's claim with regard to its printing activity and allowed deduction under section 80-IA. However, the Assessing Officer was not satisfied with regard to other income shown by the assessee on which deduction under section 80-IA was claimed, with reference to courier income, sale of scrap and job charges income. With regard to courier income, it was submitted before the Assessing Officer that the company has entered into lump sum contract with customers which covered printing of share issue forms, numbering it, packing it appropriately in the required number and taking responsibility of despatching it to the different cities and Stock Exchange of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for printing was part and parcel of the distribution of the share application forms, the courier charges have to be taken as part of the printing work. If this work had not been undertaken by the appellant, then the appellant would not have received the contract for printing. As the courier work was part and parcel of the printing work, the courier charges have to be taken as derived from an industrial undertaking. Further, the labour charges disclosed were for printing work and though it bore the nomenclature of labour charges, it was in fact job work for printing and, therefore, income derived from an industrial undertaking. The sale of scrap generated in the printing work is as a result of the main work of printing and has got to be treated as a profit derived from an industrial undertaking. The earning of these receipts have a near and proximate nexus with that of an industrial undertaking. The Assessing Officer is, therefore, directed to allow deduction under section 80-IA of the Income-tax Act of these receipts also." 4. Aggrieved by the above order of the CIT(A), the Revenue is in further appeal before us. 5. It was argued by the learned DR that benefit of deduction under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifies for section 80-I deduction. Respectfully following the judgment of the jurisdictional High Court, we are inclined to agree with the learned AR that the income from job work and sale of scrap was eligible for deduction under section 80-I. We, therefore, do not find any reason to interfere in the order of the CIT(A). 9. With regard to courier income, we find that the Assessing Officer denied the deduction only by stating that in its written submission, the assessee himself has stated that such income is "attributable to" the business of the company. The Assessing Officer, however, had categorically noted that the assessee had undertaken "lumpsum" contract with the customers for related after-manufacturing services like courier charges, labour works etc. The CIT(A) has allowed the deduction under section 80-IA on the plea that the courier charges was part of the sale profits even though for accounting purpose it has been credited separately by the assessee. 10. Let us now discuss various case laws with reference to the deduction under sections 80HH and 80-I in which it was held that only income derived from industrial undertaking qualifies for deduction. As per our considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80-IA. The provisions of section 80-IA as contained in the statute book for the relevant assessment year under consideration reads as follows : "Deduction in respect of profits and gains from industrial undertakings, etc., in certain cases.-Where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking or a hotel or operation of a ship or the business of a hotel....." [Emphasis supplied] 11. It is crystal clear from the reading of the above provisions that the income derived from business of industrial undertaking is eligible for deduction under section 80-IA. There is no dispute to the fact that there are plethora of judgments which lays down the proposition that the words "derived from industrial undertaking" had been used by statute to restrict the deductions of only those income which has directly derived from the industrial undertaking and not to other income which is incidental to the carrying of industrial undertaking. There is also no dispute to the fact that these judgments have been rendered in the context of deduction under sections 80-I and 80HH. Let us know find out what the section 80-I spea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stationery etc. to the destination to the concerned parties, the entire amount received is a part of the sale proceeds. Only making of entry in the books of account to the effect that part of the receipt was on account of printing and part of receipt was on account of courier charges will not disqualify the assessee from claiming deduction in respect of its product manufactured out of its industrial undertaking. There are plethora of judgments to the effect that accounting entry is not decisive to allow a claim given under statute. Merely on the basis of accounting entry, the assessee cannot claim a deduction which is not available to him under the Act. Similarly on the basis of book entry department cannot restrain or deny a claim of deduction which is otherwise available as per provisions of law. From the order of the Assessing Officer, we find that the case laws discussed by him pertain to sections 80-I and 80HH. We have already discussed above the insertion of 'any business of' in section 80-IA, during the assessment year 1995-96 under consideration. 14. In view of the above discussion and in the interest of justice, we restore this ground to the file of Assessing Officer to e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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