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TMI Blog2015 (8) TMI 428X X X X Extracts X X X X X X X X Extracts X X X X ..... ther on the facts and in the circumstances of the case, the Appellate Tribunal has substantially erred in law in deleting the disallowance made under Section 32AB of the Income-tax Act, 1961 ?" 3 The brief facts giving rise to the present appeal are that the respondent-company is in the business of manufacture of pharmaceuticals. A return came to be filed by the respondent-company for the Assessment Year 1990-91 under Section 139(1) of the Act. The return was accompanied by the audited statement of account, Tax Audit report under Section 44AB Audit Report, u/s 32AB and Auditor's Report u/s 80- HHC of the Act. 4 Pursuant to the notice issued under Section 143(2) and 143(1) of the Act, the respondent-company submitted details by producing various documents. The respondent company was heard by the Assessing Officer on various dates. Thereafter, the Assessing Officer by passing order, rejected the claim of the assessee of claiming amount of Rs. 34,37,020 as part and parcel of business income under Section 32AB of the Act on the ground that the assessee failed to furnish the details of each and every item and that the same cannot be treated as eligible business income. 5 The said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Hon'ble Apex Court in the case of Apollo Tyres Limited v. Commissioner of Income-tax, [2002] 122 TAXMAN 562 (SC). He would submit that the Apex Court while dealing with the provisions of Section 32AB, more particularly with regard to eligible business income, has categorically held that the assessee has to establish that certain income earned by the assessee is part of its business. 8 Mr Mehta has also relied upon the decision of the Gauhati High Court in the case of Commissioner of Income-tax v. Dinjoye Tea Estate (P) Limited, 224 ITR page 263. By relying upon this decision, he would submit that the income received as interest, dividend, etc. cannot be treated as business income. He would, therefore, submit that the appeal be allowed and the orders passed by the CIT (Appeals) as well as Tribunal be quashed and set aside. 9 On the other hand, Mr S.N. Soparkar, learned Senior Advocate, assisted by Mr Bandish Soparkar has vehemently resisted this appeal and has submitted that there is concurrent finding of facts by the authorities below which does not call for any interference as far as factual aspects are concerned. He would, therefore, submit that under Section 32AB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome are to be included in the profits of the eligible business income while computing the deduction available to the assessee under Section 32AB of the Act. Similar is the case of the Madras High Court in the case of Commissioner of Income-tax v. Tirupattur Coop. Sugar Mills Limited, [2009] 310 ITR 360 (Mad). The last judgment which has been relied upon by Mr Soparkar is the decision in the case of Commissioner of Income-tax v. J.C. Scott, (2014) 223 Taxman 144 (Delhi) which has categorically held that the interest, etc. earned during the course of business would fall within business income, as per the provisions of Section 32AB of the Act. He would, therefore, submit that the appeal be dismissed. 14 We have heard learned advocates appearing for the parties at length. Since the case is of the Assessment Year 1990-91 the relevant provisions applicable on the said date would be necessary to be referred to for proper appreciation. First of all, we would like to reproduce hereinbelow the provisions of Section 32AB of the Income-tax Act, which are applicable in the present case:- "32AB. (1) Subject to the other provisions of this section, where an assessee, whose total income includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the assessee, used in India; (b) such machinery or plant is imported into India from any country outside India; and (c) no deduction on account of depreciation in respect of such machinery or plant has been allowed or is allowable under this Act in computing the total income of any person for any period prior to the date of the installation of the machinery or plant by the assessee; (iv) "Tea Board" means the Tea Board established under section 4 of the Tea Act, 1953 (29 of 1953). (3) The profits of business or profession of an assessee for the purposes of sub-section (1) shall] be an amount arrived at after deducting an amount equal to the depreciation computed in accordance with the provisions of sub-section (1) of section 32 from the amounts of profits computed in accordance with the requirements of Parts II and III of the Schedule VI to the Companies Act, 1956 (1 of 1956), as increased by the aggregate of- (i) the amount of depreciation; (ii) the amount of income-tax paid or payable, and provision therefor; (iii) the amount of surtax paid or payable under the Companies (Profits) Surtax Act, 1964 (7 of 1964); (iv) the amounts carried to any reserves, by whatever name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heads. The case of the assessee before the authority was that the above referred income is earned during the course of business and out of business efforts and business activity and therefore the same shall be considered in computing the allowable deduction under Section 32AB of the Act. 16 The Commissioner of Income-tax (Appeal) has dealt with this aspect in paragraph 7 of its judgment in detail and has accepted the case of the assessee and has held that the income of the assessee referred under several heads is part of business income. The said aspect has also been considered by the Appellate Tribunal in paragraph 5.1 of its judgment. 17 The Honourable Apex Court in the case of Apollo Tyres (supra) has dealt with said aspect in detail. The assessee in the said case who was in the business of manufacturing of tyres. However, the assessee used to invest certain money in UTI for extension of its business and whatever profit the assessee has earned from the said investment was treated as income from eligible business under the provisions of Section 32AB of the Act. 18 We do not find any perversity with regard to findings of both the Courts below with regard to conclusion arrived a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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