9911796707
TMI Blog2003 (5) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... or decision by this court at the instance of the Revenue, pursuant to the direction issued by this court in O.P. No. 2033 of 1996. "Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the tea development allowance under section 33AB of the Income-tax Act, 1961, must be in relation to the income of the business of growing and manufacturing tea, rather than to the taxable portion of such income?" The brief facts necessary for decision of the above question are as follows. The respondent-assessee is a limited company engaged in the cultivation and manufacture of tea. During the accounting period relevant to the assessment year 1986-87, the assessee had deposited a sum of Rs. 18 lakhs und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the deduction under section 33AB(1)(a) of the Act to 20 per cent, of the amount arrived at in accordance with the provisions of rule 8 of the Income-tax Rules. Learned counsel, Sri Anil D. Nair, appearing for the assessee, on the other hand, submits that going by the provisions of section 33AB of the Act is geared to the business profit from the growing and manufacturing of tea computed under the head "Profits and gains of business or profession" and that both the appellate authorities have rightly found that the deduction allowable under section 33AB of the Act must be geared to the business profit of Rs. 1,06,05,455. In order to appreciate the rival contentions, it is necessary to refer to the provisions of section 33AB of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be ascertained only after ascertaining the amount provided under clause (b) of the said sub-section. Under clause (b), a deduction of a sum equal to 20 per cent, of the profits of such business computed under the head "Profits and gains of business or profession" is profit before making any deduction under this section. The profits of such business referred to in clause (b) must necessarily be the profits of the business referred to in the main part of sub-section (1), namely, "business of growing and manufacturing of tea in India". The assessing authority in the instant case has worked out the profits of the business of growing and manufacturing tea in India at Rs. 1,06,05,455. If the deduction as provided under section 33AB(1), clause (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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