9911796707
TMI Blog2011 (5) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... 97-98 dismissing the appeal preferred by the assessee. The facts giving rise to filing of this appeal may be summed up thus: a) The assessee is a public limited liability company within the meaning of the Companies Act, 1956. The appellant carries on the business of growing and manufacturing tea. b) The appellant has 17 tea gardens and its employees from time to time come from the gardens to the Headquarter of the appellant at Calcutta for the purpose of appellant's business. c) The appellant maintains a transit flat at Calcutta for the garden employees who come to the Headquarters for official work and such transit flat is exclusively used by the employees of the appellant who come to Calcutta for official w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioning the composite income in the ration of 60:40 or after such apportionment and as to the method of quantification of the deduction under the said Section. g) For the Assessment Year 1997-98 the appellant claimed deduction under Section 33AB of the Act amounting to Rs.50,69,336/-. The appellant also claimed deduction under Section 80HHC before apportioning the composite income in the ration of 60:40. h) In the order of assessment dated March 31, 2000, the Assessing Officer allowed deduction under Section 33AB as claimed in the return, though with reference to the assessed income, according to the appellant, it was entitled to a higher deduction. The Assessing Officer computed and allowed deduction under Section 80HHC after appor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Tribunal, however, remanded the matter to the Commissioner of Income-tax (Appeals) for the purpose of deciding the quantum of deduction under Section 33 AB with reference to 40% of the composite income as assessed. Being dissatisfied, the assessee has come up with the present appeal. A Division Bench of this Court at the time of admission of this appeal formulated the following substantial question of law: "a) Whether on a proper interpretation of the provisions of sub-section (4) and (5) of Section 37 of the Income-tax Act, 1961, the Tribunal was justified in law in holding that the transit flat for employees was a guest house and the expenditure in respect thereof was to be disallowed as expenditure on the maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As regards the third question formulated by the Division Bench, Mr. Khaitan contended that the provision contained in Section 33AB of the Act should be applied first and after calculating the deduction available under the said provision, the total deduction should be excluded and, thereafter, Rule 8 of the Rule should be applied for the purpose of calculation of 40% of the total income. Mr. Khaitan contends that the Tribunal below committed substantial error of law in holding that the deduction under Section 33AB was to be calculated on 40% of the income determined under Rule 8. He, therefore, prays for setting aside the aforesaid finding of the Tribunal below. As regard the fourth question formulated by the Division Bench, Mr. Khaitan fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained in Section 33AB of the Act without the proviso to the same as those are unnecessary for our purpose and the said provisions are quoted below: "33AB. (1) Where an assessee carrying on business of growing and manufacturing tea in India has, before the expiry of six months from the end of the previous year or before furnishing the return of his income, whichever is earlier, deposited with the National Bank any amount or amounts in an account (hereafter in this section referred to as the special account) maintained by the assessee with the Bank in accordance with, and for the purposes specified in, a scheme (hereafter in this section referred to as the scheme) approved in this behalf by the Tea Board, the assessee shall, subject to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usly held that the deduction under Section 33AB of the Act would be made after the taxable amount will determine under Rule 8 of the Rules. The question of application of Rule 8 does not come so long the profit or loss from the business of growing and manufacturing tea is determined after deduction of all permissible deductions under the Act. We, thus, answer the third question in the negative and against the Revenue. In view of our above finding on the third question, the second question has lost its relevance and no answer is necessary for effective disposal of this appeal. The appeal is thus partly allowed by answering the questions referred to above and modifying the order of the Tribunal only on the third question indic ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
