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TMI Blog2024 (3) TMI 1079X X X X Extracts X X X X X X X X Extracts X X X X ..... Act) of Rs. 2,85,024/- only, as against appellant's claim for deduction of Rs. 76,97,918/-. The Assessing Officer restricted the deduction under Section 32AB of the Act as in his view occupancy charges earned by appellant from letting of space in the building known as Express Towers, Nariman Point, Mumbai is taxed under the head "income from house property" and hence, does not form part of "profits of eligible business or profession" for the purposes of computation of deduction under Section 32AB of the Act. Such income excluded by the Assessing Officer in the computation of deduction under Section 32AB of the Act is Rs. 1,27,11,742/- and the eligible deduction is 20% thereof. 3. Aggrieved by the aforesaid order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] who upheld the Assessing Officer's view by an order dated 22nd March 1991. This order of CIT(A) was impugned before the ITAT. The ITAT, by the impugned order dated 29th May 2002, held that since the rental income has been assessed in appellant's case as "income from house property" and has not been considered as business income, it will not qualify for deduction under Section 32AB of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Chhotaray submitted that reading of Section 32AB of the Act makes it clear that it cannot include income computed under the heads computation of total income from house property, capital gains and other sources. This is because Section 32AB of the Act appears under Chapter IV of the Act entitled "computation of total income" and more specifically under Part D of the same Chapter entitled "profits and gains of business or profession". The sub-headings given to the various parts of Chapter IV indicate the different heads of income like salaries, income from house property, profits and gains of business or profession, capital gains etc. These sub-headings clearly indicate that the respective Sections occurring in the parts of Chapter IV apply to the respective heads of income under which the income is to be computed. Therefore, it is clear that the computation of business income has to be done strictly in accordance with the provisions of Section 28 to Section 44D of the Act. Since the income from house property, capital gains and other sources are governed by Sections occurring in other parts, the deduction under Section 32AB of the Act cannot be extended to the other parts unle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arried on by an industrial undertaking, which is not a small-scale industrial undertaking as defined in section 80HHA; (b) the business of leasing or hiring of machinery or plant to an industrial undertaking, other than a small-scale industrial undertaking as defined in section 80HHA, engaged in the business of construction, manufacture or production of any article or thing specified in the list in the Eleventh Schedule;] [(ii)" new ship" or" new aircraft" includes a ship or aircraft which before the date of acquisition by the assessee was used by any other person, if it was not at any time previous to the date of such acquisition owned by any person resident in India; (iii)" new machinery or plant" includes machinery or plant which before its installation by the assessee was used outside India by any other person, if the following conditions are fulfilled, namely:- (a) such machinery or plant was not, at any time previous to the date of such installation by the assessee, used in India; (b) such machinery or plant is imported into India from any country outside India; and (c) no deduction on account of depreciation in respect of such machinery or plant has been al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the head "profits and gains of business or profession". 8. From the language of Section 32AB of the Act it is clear that to become eligible for deduction under Section 32AB of the Act, the assessee should first have income chargeable to tax under the head "profits and gains of business or profession". If such income does not form part of the total income, the assessee will not be eligible. It is also clear that out of such income, i.e., income out of profits and gains of business or profession, the assessee must have (a) deposited any amount in an account maintained by him with the Development Bank before the expiry of six months from the end of the previous year or before furnishing the return of his income, whichever is earlier; or (b) utilised any amount during the previous year for the purchase of any new ship, new aircraft, new machinery or plant, without depositing any amount in the deposit account under clause (a), in accordance with, and for the purposes specified in, a scheme to be framed etc. If these conditions are met, then the assessee shall be allowed a deduction, such deduction being allowed before the loss, if any, brought forward from earlier years is set off und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me from house property has to be construed as forming part of the same business as there is one account for the printing business and for income from house property and the business is conducted under a common management. There is one profit and loss account and one balance sheet. It is the perception of the activities from the point of view of businessman that is material. It is such perception that is recognised in Part II and Part III of the Sixth Schedule to the Companies Act, 1956. In Section 32AB(3) or Section 32AB (1)(ii) of the Act, the expression "chargeable to profits and gains of business" is conspicuous by its absence. Hence, the dichotomy as between the income from printing and rental income from house property is not warranted in terms of Section 32AB(3) of the Act. 10. In our view, all eligible business or profession shall include every income except that which is excluded specifically in the definition of eligible business or profession. We find support for this view in Apollo Tyres Ltd. (Supra) of Kerala High Court and Hon'ble Apex Court. It is not the case of the Revenue or the findings of the ITAT that appellant has in its account not shown rental income as part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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