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TMI Blog1978 (9) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... . He held that in the process of selling carpets to buyers the assessee has shown a loss. The ultimate profit has resulted because of receipt of import entitlement or cash subsidy in view of the export incentive scheme of the Government of India. This was not the profit earned from the manufacturing business of the assessee. He levied tax at the rate of 65%. The assessee filed an appeal before the AAC which was partly allowed. The assessee and the department both took up the matter to the Tribunal. The Tribunal considered the matter elaborately and held that the admitted position was that the assessee was a manufacturer of carpets. He sold his products exclusively in America and Europe. Only the defective or sub-standard material was sold l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1968, so as to be entitled to concessional rates of tax in the assessment year 1974-75 ? " The relevant and material portion of clause (d), which defines an "industrial company ", is as follows: " (d) 'industrial company' means a company which is mainly engaged in the business of...... or in the manufacture or processing of goods ...... Explanation.-For the purposes of this clause, a company shall be deemed to be mainly engaged in the business of...... manufacture or processing of goods......... if the income attributable to any one or more of the aforesaid activities included in its total income of the previous year (as computed before making any deduction under Chapter VIA of the Income-tax Act) is not less than fifty-one per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the import entitlement or cash subsidy. The receipt from the sale of import licences was hence attributable to the activity of exporting carpets within the meaning of the aforesaid cl. (d). The Tribunal was, in our opinion, right in upholding the assessee's contention. Another question which has been referred to us is : "Whether the AAC was justified in directing the ITO to look into the claim of deduction of bonus afresh and then to allow the same keeping in view the practice followed by the assessee ? " We have heard the learned counsel, but we are not satisfied that there is any substance in the contention raised on behalf of the revenue. The AAC had full power to remand a case for considering a particular material on the record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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