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TMI Blog2015 (8) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... directly from the industrial undertaking. Before concluding, we may notice that clause (i) of sub-section (2) of section 32AB defines eligible business or profession to mean business or profession other than those specified in sub-clauses (a) and (b) of clause (i) of section 32AB(2). Admittedly, the present case is not in either of the exclusionary clauses. Under the circumstances, we are of the opinion that the Tribunal committed no error directing the Assessing Officer not to exclude interest income for the purpose of computing the deduction u/s 32AB of the Act - Decided against revenue. Separate relief u/s 80HHA and 80I - Whether the Appellate Tribunal is right in law and on facts in directing to allow separate relief u/s 80HHA and 80I of the Act? - Held that:- Issue is concluded against the Revenue by virtue of the judgment of the Apex Court in the case of Joint Commissioner of Income Tax v. Mandideep Eng. & Pkg. Ind. P. Ltd., (2006 (4) TMI 75 - SUPREME Court) wherein held sections 80HH and 80-I, are independent of each other and therefore a new industrial unit can claim deductions under both the sections on the gross total income independently or that deduction u/s 80-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sum of ₹ 12,49,427/- was utilized for the purchase of machinery out of the profits and gains of business and profession and a sum of ₹ 3,30,000/- was deposited in its account in the Development Bank. The Assessing Officer though accepted such figures, noticed that for working out the limit of deduction under section 32AB of the Act, the assessee had also claimed interest income forming part of the profits from eligible business. The Assessing Officer was of the opinion that such interest income must be treated under the head of income from other sources and therefore, cannot form part of the income from eligible business for ascertaining the limit of deduction eligible under section 32AB of the Act. He accordingly, reworked out deduction under section 32AB of the Act on such basis. 5. The assessee carried the issue in appeal before the Commissioner (Appeals). Before the Commissioner, the assessee pointed out that major portion of the interest was received from two financial institutions which had insisted for keeping the business deposits on which the assessee had been granted interest at the rate of 12%. It was because of this insistence by the financial instituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant time, which read as under: 32AB.(1) Subject to the other provisions of this section, where an assessee whose total income includes income chargeable to tax under the head Profits and gains of business or profession , has out of such income - (a) deposited any amount in an account (hereafter in this section referred to as deposit account) maintained by him with the Development Bank before the expiry of six months from the end of the previous year or before furnishing the return of his income, whichever is earlier; or (b) utilised any amount during the previous year for the purchase of any new ship, new aircraft, new machinery or plant, without depositing any amount in the deposit account under clause (a), in accordance with, and for the purposes specified in, a scheme (hereafter in this section referred to as the scheme) to be framed by the Central Government, or if the assessee is carrying on the business of growing and manufacturing tea in India, to be approved in this behalf by the Tea Board , the assessee shall be allowed a deduction (such deduction being allowed before the loss, if any, brought forward from earlier years is set off under section 72) of - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible business or profession assumes significance. Revenue contends that while computing this figure, the assessee's interest income should be excluded. 12. We may notice that the Kerala High Court in the case of Appollo Tyres Ltd. (supra) referring to CBDT circular No.461 dated 9th July 1986 observed that benefit under section 32AB of the Act will be available to all business income from whatever sources other than those mentioned in sub-clause (a) and (b) of clause (i) of sub-section (2) of the said section. It was observed that sub-section (1) of section 35AB consists of two parts. One is regarding utilization of income from business and the other is regarding deduction available on the utilization of such income. Utilization of income in order to qualify for deduction must be out of the income chargeable to tax under the head profits and gains of business or profession , whereas when it comes to deduction part, the same is an amount equal to 20% of the profits of the eligible business. We are conscious that in the said decision, the High Court upheld the Tribunal's finding that income from UTI shares was part of the assessee's eligible business. 13. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Therefore, we are disposed to think that the factual matrix is covered by the decisions rendered in Bokara Steel Ltd. (1999) 236 ITR 315 (SC), Karnal Cooperative Sugar Mills ltd. (2000) 243 ITR 2 (SC) and Koshika Telecom Ltd. (2006) 287 ITR 479 (Delhi) and, accordingly, we hold that the view expressed by the Tribunal cannot be found fault with. 15. In view of the exercise already undertaken by the Delhi High Court in the case of Jaypee DSC Ventures Ltd (supra), we may not separately refer to in detail the facts and ratio of the various decisions of the Supreme Court, noted above. Suffice it to conclude, in the present case also, the assessee was compelled to park a part of its funds in fixed deposits under the insistence of the financial institutions. On such funds, the assessee received interest. Such income cannot be treated as income from other sources and must be seen as part of the assessee's business of manufacturing and selling of chemicals. The decision of the Apex Court in the case of Pandian Chemicals Ltd. (supra) would not be applicable. In the said case, the Apex Court was interpreting the phrase 'derived from' used in section 80HH of the Act. It was i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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