9911796707
TMI Blog2006 (3) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... ng substantial questions of law: "1. Whether the Tribunal was justified in holding that the assessee is entitled to get the benefit of profit earned out of sale of the assets while calculating the benefit available to him under section 32AB of the Income-tax Act? 2. While granting the benefit to the assessee under section 32AB of the Income-tax Act, whether the Tribunal was justified in placing reliance upon the authority of the Supreme Court in Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84, when admittedly section 32AB was not on the statute book? 3. Whether the law laid down by their Lordships of the hon'ble Supreme Court in Cambay Electric Supply Industrial Co. Ltd. [1978] 113 ITR 84 which has interpreted section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be included while calculating the deduction available to the assessee under section 32AB. Accordingly, the Assessing Officer excluded the sum of Rs. 18,97,929 from the total profit of the assessee earned from the business and then calculated the deduction available to the assessee under section 32AB of the Act. The assessee felt aggrieved of this order of the Assessing Officer, filed an appeal to the Commissioner of Income-tax (Appeals). By order dated November 29, 1996, the Commissioner of Income-tax (Appeals) allowed the appeal in so far as this issue was concerned. It was held that in the light of the decision of the Supreme Court rendered in the case of Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 even a profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fixed assets could be examined under section 50 of the Act and, secondly, it being not a profit earned by the assessee from their main business, the same could not have been taken into consideration for calculating the deductions available to them under section 32AB. In reply, learned counsel for the respondent supported the view of the Tribunal. Having heard learned counsel for the parties and having perused the record of the case, we are inclined to allow the appeal. In our considered view a plain reading of section 32AB would go to show that in order to claim deduction under section 32AB only the profits and gains of business or profession earned by the assessee is required to be taken into consideration. Any profit earned by sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n these circumstances, the interpretation made by the Supreme Court of the words, occurring in section 80E would not apply for interpreting the words used in section 32AB. We are, therefore, clearly of the view that the Commissioner of Income-tax (Appeals) and the Tribunal committed an error of law in placing reliance on the law laid down by the Supreme Court in the case of Cambay Electric Supply Industrial Co. Ltd. [1978] 113 ITR 84 which has no application to the facts of this case. As rightly urged by learned counsel for the appellant, the case of the assessee would fall in section 50 of the Act for the purpose of calculating capital gains earned in the case of sale of depreciable assets. In other words, the profit earned by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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