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TMI Blog2006 (8) TMI 163X X X X Extracts X X X X X X X X Extracts X X X X ..... of this case, the Income-tax Tribunal was right in law to hold that the appellant was not entitled to deduction under section 80-IA in respect of profits and gains from the business of sale of PVC, Liberty Shoes got manufactured according to its own specifications, design etc.? (ii) Whether, on the facts and circumstances of this case, the interpretation on section 80-IA placed by the Tribunal is legally correct when it has not focused its attention on the word 'any' business used in the said section?" 2. The assessee computed its income after deducting income of Rs. 37,95,908/- under section 80-IA of the Income-tax Act, 1961 (in short, "the Act"). Claim of the assessee was that finished goods were purchased and exported and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustrial undertaking yet the same may not fall within the expression of 'derived from' so as to be eligible for the benefits envisaged under section 80-IA of the Act. Another notable judgment on the issue is in the case of Sterling Foods [1999] 237 ITR 579 (SC). Herein also, the apex court opined that where the nexus between the income and the industrial undertaking was not direct but was only incidental, it would not fall within the expression 'profits derived from industrial undertaking'. Similar is the decision of the hon'ble apex court in the case of Pandian Chemicals Ltd. v. CIT [2003] 262 ITR 278. Their Lordships, in the aforesaid case, were dealing with the question as to whether the interest derived from the depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntended that the purchase of finished goods by it according to his requirement and of specific design etc. would constitute the business of the assessee's industrial undertaking on account of the decision of Ashok Leyland Ltd. [1997] 224 ITR 122. The hon'ble apex court was dealing with the provisions of section 80-I as they stood for the assessment years 1966-67 and 1967-68. Section 80-I, at that time, was couched with the words 'attributable to', whereas during the year under consideration, the provisions of section 80-I are couched with the words 'derived from'. The distinction between the two expressions has already been discussed by us in the earlier part of our order and is thus, in our view, reliance placed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and are of the view that complete answer to the issue raised by the assessee is available in section 80-IA of the Act itself, if read as a whole. Sub-section (5) of section 80-IA of the Act provides for the quantum of benefit available to an industrial undertaking. It clearly provides for a fixed percentage of the profits and gains derived from such industrial undertaking. The relevant sub-section is extracted below: "80-IA.(5) The amount referred to in sub-section (1) shall be- (i) (a) in the case of an industrial undertaking referred to in sub-clause (a) or sub clause (d) of clause (iv) of sub-section (2), twenty-five per cent. of the profits and gains derived from such industrial undertakings;" 6. We have also gone into similar issu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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