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TMI Blog1999 (10) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... n these appeals is relating to the computation of deduction under section 80-I. The Assessing Officer has excluded the interest income from the income eligible for computation of deduction under section 80-I on the ground that the said income is assessable under the head income from other sources and the same has nothing to do with the profits derived from industrial undertaking. For Assessment year 1993-94, the Assessing Officer has also excluded the commission income of ₹ 18.84 lakhs from the computation of deduction under section 80-I. 3. The learned counsel for the assessee contended that the Assessing Officer was wrong in excluding the interest income from the eligible profits for the purpose of deduction under section 80-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest paid on borrowed funds. 5. For Assessment year 1990-91, the learned counsel for the assessee pointed out, that the Assessing Officer has excluded the interest income from debtors also of ₹ 36,757 when the Assessing Officer for Assessment year 1991-92 has allowed the deduction in respect of the similar income. 6. For Assessment year 1993-94 it was contended that the assessee has no objection in excluding the income from commission from the eligible profits but the expenses incurred for earning the commission have got to be excluded for working out the net commission which alone is to be excluded from the profits in order to arrive at the eligible profits for the purpose of deduction. 7. The learned Departmental Represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the four years and the income from commission in Assessment year 1993-94 from the eligible profits derived from an industrial undertaking. In our considered view the issue is squarely covered by the decision of the Supreme Court in the case of Sterling Foods (supra), the decision which has been relied upon by the learned counsel for the assessee. In this case the assessee was engaged in processing prawns and other sea food, which it exported. It also earned some import entitlements granted by the Central Government under an Export Promotion Scheme. The assessee was entitled to use the import entitlements itself or sell the same to others. It sold the import entitlements to others. Its total income for Assessment year 1979-80 included the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case, the nexus was not direct but only incidental. The industrial undertaking exported processed sea foods. By reason of such export, the export promotion scheme applied. Thereunder, the assessee was entitled to import entitlements which it could sell. The sale consideration therefrom could not be held to constitute a profit and gain derived from the assessee s industrial undertaking. It was accordingly held that the receipts from the sale of import entitlements would not be included in the income of the assessee for the purpose of computing the relief under section 80HH of the Income-tax, 1961. 10. We may now deal with the contention on behalf of the assessee that the interest income should be set off against the expenditure by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court that under the Income-tax Act, 1961 the total income of a company is chargeable to tax under section 4 and it has to be computed in accordance with the provisions of the Act. Section 14 lays down six heads for the purpose of computa- tion of income. Their Lordships further held that it is possible for a company to have six different sources of income each one of which is chargeable to income-tax. Profits and gains of business or profession is only one of the heads under which the a company s income is liable to be assessed to tax. Their Lordships further held that if a company keeps the surplus funds in short-term deposits in order to earn interest such interest will be chargeable under section 56. In other words, if the capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d any appeal from this finding which is given against it. In any case this question is now concluded by the decision of this Court in the case of Tuticorin Alkali Chemicals Fertilizers Ltd. (supra). Hence we are not called upon to examine that issue . At Page 323 their Lordships of the Supreme Court have further noted the company may also as in that case keep the surplus funds in short-term deposits in order to earn interest. Such interest will be chargeable under section 56 of the Income-tax Act . Their Lordships further held that the interest earned by investing borrowed capital in short-term deposits is an independent source of income connected with the construction activities or business activities of the assessee. 13. In the ligh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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