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TMI Blog1987 (3) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... not in dispute. The assessee is a private limited company. It carries on the business of manufacture and sale of cotton seed oil, that is, vanaspati oil. For the assessment year 1970-71, the assessee claimed deduction under section 80-I of the Income-tax Act, 1961, on its profits from the aforesaid business. Observing that the profits on which relief was claimed under section 80-I included profits on the sale of cotton seed oil-cake, cotton seed lint and cotton seed husk, etc., which do not qualify for the relief under that section, the Income-tax Officer restricted the relief on the profits from the manufacture and sale of cotton seed oil only The Appellate Assistant Commissioner confirmed, the order of the Income-tax Officer. The Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in CIT v. Sutna Stone and Lime Co. Ltd. [1982] 138 ITR 37. The assessee in that case was carrying on business of manufacture and sale of limestone on its quarries which admittedly constituted a " priority industry " within the meaning of section 80-I of the Income-tax Act, 1961. In the course of its above business, the assessee was also deriving profits from the manufacture of lime. The question had arisen whether the profits derived from manufacture and sale of lime were attributable to the " priority industry ". The Tribunal had found as fact that the production of lime and the production of limestone are integrated composite parts of the one productive activity of the assessee. On the above finding, it was held that the profits d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal has given a categorical finding that the cotton seed cake, lint and husk, etc., are by products in the business of manufacture and sale of cotton seed oil, that is, the priority industry. In the circumstances, the decision of the Calcutta High Court is applicable to the facts of the case in hand and not the decision of the Madras High Court. Accordingly, we hold that the assessee's business of manufacture and sale of cotton seed oil is a priority industry and that all profits and gains attributable to such a priority industry qualify for deduction under section 80-I of the Income-tax Act, 1961. In the above view of the matter, the question is answered thus The relief under section 80-I of the Income-tax Act, 1961, is to be gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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