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TMI Blog2008 (1) TMI 822X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent. During the accounting year relevant for the assessment year 1996-97, the assessee invested Rs. 68 lakhs towards equity in a company by name Confoams Ltd. which set up a new industrial unit for centrifuging rubber latex. The agricultural income of the assessee computed for the relevant assessment year without deduction under section 9(4) was Rs. 39,67,570, whereas the investment by the assessee in the equity of the company which started new industrial undertaking during the previous year in respect of which 50 per cent. of the claim was made under section 9(4) was Rs. 68 lakhs. While completing the assessment, the Assessing Officer disallowed deduction claimed under section 9(4) of the Act on two grounds. The first ground of disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in the previous year of that company, computed without deduction provided under this sub-section or rupees one crore, whichever is less, provided (i) such investment is not in plantation industry or agricultural activities ancillary thereto which is directly a downstream industry of the produce of that plantation ; (ii) the amount invested is fully utilised within the State within a period of three years from the date of investment or before the commencement of commercial production of such industrial undertaking, whichever is earlier ; and (iii) there is no transfer of investment within a period of five years of such investment." Sub-section (4) first introduced with effect from April 1, 1994, was amended by the Finance Act, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee's plantation is not entitled for the benefit of deduction. The amended provision provides in the first proviso to section 9(4) that investment in the plantation industry or in an industry engaged in agricultural activities auxiliary to the plantation industry does not qualify for deduction. The agricultural activity auxiliary to the plantation industry need not always be an industrial activity and in order to clarify what is the agricultural activity auxiliary to the plantation industry that is disqualified from the benefit, the amendment is introduced which makes it clear that a downstream industry of the produce of the plantation of the assessee is not entitled to benefit. The assessee is admittedly engaged in rubber cultivation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... centrifuging field latex in which the assessee made the investment does not qualify for the benefit of deduction made by the investor as it is only processing the produce of plantation industry. Further, we find that the purpose of section 9(4) is not to give benefit on additional investments made by the plantation in the allied industries for processing of its produce. What the Legislature intends is investment in other industries unconnected with plantation or its produce to promote industrial growth. We are, therefore, of the view that investment in the industry engaged in centrifuging of field latex is not entitled for deduction under section 9(4) of the Act. We, therefore, uphold the order of the Tribunal on this issue. Even though t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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