INCOME TAX ACT, 1961
--Deduction under section 80-IB--Profits and gains derived from industrial undertakings Interest earned on FDRs kept as guarantee for securing bank limits--Assessee claimed deduction under section 80-IB in respect of interest earned on FDRs declaring same as income of an industrial undertaking on the plea that the said FDRs were kept as guarantee with the Electricity Department and the banks for securing credit facilities. Assessee also contended that interest part was part of business income of an industrial undertaking, therefore, eligible for deduction under section 80-IB. assessing officer however, disallowed the deduction and treated it as 'Income from other sources'. Held: Was justified, as a conjoint reading of section 80-IB(l) and 80-IB(4) would reveal that the expression 'profits and gains derived from any business' is to be read as 'profits and gains derived from the industrial undertaking' and the scope and ambit of section 80-IB(1) is not in any manner wider than that of 80-IB(4). A holistic view of section 80-IB would reveal that what is intended by the law Makers to qualify for deduction is 'profits and gains derived from the industrial undertaking'. There is, therefore, no reason to bring within the fold of 'profits and gains derived from industrial undertakings' any income beyond the activities of the industrial undertakings on the ground that the words 'any business' finds expression in 80-IB(l). Therefore, interest income on FDRs could not be said to be an income flowing from the business activity of an industrial undertaking eligible for deduction under section 80-IB.
Income Tax Act, 1961, Section 80-IB
In the Jammu & Kashmir High Court
Hasnain Massodi & Virender Singh, JJ.
Asian Cement Industries v. ITAT
ITA Nos. 5 & 6 of 2007
24 August, 2012
Appellant by : Subash Dutt and Suraj Singh Wazir
Respondent by : D. S. Thakur and K.D.S. Kotwal
Virender Singh, J.
Aggrieved of the order dated 1-11-2006 passed by Income Tax Appellate Tribunal Amritsar Bench (for short ITAT), M/s Asian Cement Industries, Industrial Estate, Kathua (for short Assessee) is before us in the present two appeals filed under section 260A of the Income Tax Act, 1961 (for short Income Tax Act) involving the identical issues on facts and law. The appeals, as such, are taken on board together for consideration for admission on substantial questions of law.