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TMI Blog2015 (2) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... concluded by this court today itself in Tax Appeal No.22 of 2001, which reads as under: "1. By way of this appeal, the appellantrevenue has challenged the order dated 24.09.1999, passed by the Income Tax Appellate Tribunal, Ahmedabad [for short "the Tribunal"] in ITA No.3461/Ahd/93, whereby the appeal preferred by the revenue was partly allowed. 2. The facts in brief are that the respondentassessee is engaged in the manufacturing of sodium Metal and Transportation of goods. The assessee had filed its return of income on 31.12.1990 for the assessment year 199091 and declared total income at Rs. 25,17,082/-. The return was processed under Section 143(1)(a). Thereafter, the Assessing Officer, after scrutiny, passed order under Section 143(3) of the Income Tax Act and charged interest. Against the order of the Assessing Officer, the assessee filed an before before the Commissioner of Income Tax, Baroda. The CIT(A), vide order 30.06.1993 allowed the appeal of the assessee. 2.1. Being aggrieved and dissatisfied with the order of the CIT(A), the revenue filed an appeal before the Income Tax Appellate Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; 4.1. The Assessing Officer's contention was that the appellant company had not run the factory even for a few days but had given the assets on lease from the day one. Rebutting the claims of the appellant, the Assessing Officer observed that it could not be said that the premises were given on lease temporarily. Secondly, the activity of leasing out was not of the object of the company. Since the main object of the company was to carry on the business of manufacturing, purchasing selling refining etc. of sodium and other chemicals, by no stretch of imagination could it be said that by giving on rent the factory in which the company itself was a partner, which was to manufacture shoe polish from the first day of its incorporation would help the appellant company in manufacturing of even trading of sodium or its byproduct. Therefore, in the opinion of the Assessing Officer, income from lease rent was income from other sources and therefore, deduction u/s. 32AB was not allowable to the appellant company on this income. 4.2. Similarly, bar interest on debentures, the Assessing Officer has observed after referring to the language of Section 32AB(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from reserves or provisions, if such amounts are credited to the profit and loose accounts; 4.3. Now reference to Circular No.461 dated 9.7.86, 161 ITR 24 (St.) wherein, the provisions of Section 32AB has been explained reads as under: "The new scheme is applicable to all existing types of assessee as also to the professional and leasing companies which have not leased out machinery to those industrial undertaking engaged in the manufacture or production of an article of thing listed in the Eleventh Schedule to the Income Tax Act." The aforesaid circular had come up for reference in recent decision in the case of Apollo Tyres Ltd. Vs. Dy. CIT (coch), 43 ITD 463, wherein it has been observed as under: "The assessee had purchased certain machinery or plant from out of its income chargeable under the "profits and gains of business or profession." The assessee included the amount representating the dividend on units of UTI in computing the profits of eligible busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds which were intertwined and interlaced with each other, and the business as conducted under a common management. In Section 32AB(3) or in Section 32AB(1) (ii) the expression 'Chargeable to profits and gains of business' is conspicuous by its absence. Hence, the dichotomy as between the income from manufacture and income from units of UTI was not warranted in terms of Section 32AB(3). As both the activities constituted same business which was an eligible business, provisions of section 32AB(3) were not applicable. Therefore, for the purpose of working of the deduction rather more specifically in computing 20 per cent of the eligible profit, the income from the units of UTI should also be considered along with other income subject to adjustments prescribed therein" 4.4. Now referring to the other decisions cited by the learned learned counsel for the appellant, which are as under: 1) CIT Vs. Shri Lakshmi Silk Mills Ltd. (1951) 20 ITR 451 (SC) 2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceding assessment years, the assessee had shown the lease rent as business income, and the same had been accepted by the A.O. The Tribunal further held that the principle of res judicata was admittedly not applicable to the Income Tax Proceedings. 8. In view of the aforesaid discussion, we are of the opinion that the CIT(A) as well as the Tribunal has given cogent and convincing reasons in arriving at the conclusion and we are in complete agreement with the view taken by the Tribunal. In our view, the income of the assessee is a business income. Apart from that, learned advocate for the appellantrevenue is not in a position to show how the findings of the CIT (A) and Tribunal are bad in law and on facts. 9. In that view of the matter, we do not find any error in the order of the Tribunal. Hence, the present appeal is dismissed. Accordingly, both the question of law are answered in favour of the assessee and against the revenue." 4. In view of the above, the question of law involved in these appeals is required to be answered in favour of the assessee and against the revenue. No elaborate reasons are given as we concur with the findings of fact by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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