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TMI Blog2006 (12) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the interest receipts of Rs. 7,97,110 cannot be treated as income for other sources. 3. Without prejudice to the above the ld. CIT(A) failed to appreciate that the entire interest cannot be taken out as income from other sources. Only net interest income can be treated as interest income. Therefore, the action of the Assessing Officer is not at all justified and the same may be deleted. 4. The ld. CIT(A) erred in holding that the levy of interest under section 234C is consequential without appreciating the facts and circumstances of the case. The charge of interest under section 234C is not at all justified and the same may be deleted." 2. Ground Nos. 1-3 are in respect of interest receipts amounting to Rs. 97,110 being treated as not eligible for deduction under section 80-IB and if the interest income is liable to be taxed as income from other sources only net interest received should be treated as income and not the gross interest. 3. The facts, in brief, are that the assessee-company is engaged in the business of manufacture and sale of water purifiers and claimed deduction of Rs. 54,61,378 under section 80-IB of the Act. The Assessing Officer noted that othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce on the decision of the Tribunal in the case of Asstt. CIT v. Maxcare Laboratories Ltd. [2005] 92 ITD 11 (Cuttack) and also contended that substantial interest was earned from M/s. Siyaram Silk Mills Ltd. where the deposit was made to get the contract, hence, the same was inextricably linked with the activities of the industrial undertaking but somehow, this fact was not brought on record before the Revenue authorities, therefore, the matter could be sent back to the Assessing Officer for fresh adjudication. The ld. Counsel, on a query from the Bench, that the provisions of section 80-IA had been amended w.e.f. 1-4-2002 and the decisions relied on by the assessee were based on the old provisions hence, the same did not render any assistance to the cause of the assessee, placed reliance on the decision of the Tribunal in the case of Dy. CIT v. Eltek SGS (P.) Ltd. [2006] 10 SOT 178 (Delhi), wherein duty drawback received by the assessee was held eligible for deduction under section 80-IB. 6. The ld. Departmental Representative, on the other hand placed strong reliance, on the order of the revenue authorities and also on the decision of Hon ble Supreme Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of assessment years as is specified in sub-section (6)." 10. The section 80-IA was again restructured by the Finance Act, 1999 by bifercating the same into sections 80-IA and 80-IB. The sections 80-IA(1) and 80-IB(1) as relevant for assessment year 2000-01 are reproduced as under : "(1) Where the gross total income of an assessee includes any profits and gains derived from any business of an industrial undertaking or an enterprise referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to hundred per cent of profits and gains derived from such business for the first five assessment years commencing at any time during the periods as specified in sub-section (2) and thereafter, twenty-five per cent of the profits and gains for further five assessment years: Provided that where the assessee is a company, the provisions of this sub-section shall have effect as if for the words twenty-five per cent , the words thirty per cent" had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby where the Legislature has intended to give wider meaning to the provisions, the term any business has been pre-fixed before the category of business and where the Legislature has intended only to give exemption/deduction only on the profits derived by the industrial undertaking which are directly connected with the operations of industrial undertaking different language has been deployed. 12. We would like to add further that provisions of section 80-IB has to be read along with respective sub-sections because in sub-section (1) the reference has been made only to the profits and gains derived from such eligible business(es) and if the language of the sub-section where the business activity of the assessee falls, the deduction would be computed on the basis of the language employed in that sub-section so as to give deduction either only on the profits and gains derived from industrial undertaking or profits and gains derived from the business of an industrial undertaking/other category of business. In this view of the matter we are of the considered opinion that the case laws relied on by the assessee relating to the pre-amended provisions of section 80-IA are not of any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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