TMI Blog2015 (7) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... posits can by no means is said to be an activity of the industry so established. When the making of intercorporate deposits itself is not part of the manufacturing activity, the question of the income derived therefrom being treated as qualified for deduction under Section 80HH of the Act, does not arise.- Decided in favour of revenue. Disallowance of lease rent - ITAT allowed claim - Held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT: (Per the Honble Sri Justice L.Narasimha Reddy) The respondent is a manufacturer and exporter of drugs and intermediaries and the unit was established in an area declared as Backward. In the income tax returns submitted for the assessment year 1993-94, it claimed deduction under four heads, viz., (a) interest received on letter of credit/margin money, being ₹ 4,35,858/- ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pushyam Kiran, learned counsel for the respondent. Though the Assessing Officer disallowed four claims made by the respondent, the Commissioner granted the relief in respect of two, and the relief, as regards remaining two, was granted by the Tribunal. The order passed by the Commissioner granting relief in relation to items (a) and (c) has assumed finality. We are concerned with the grant of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt. In case the lease is referable to, or connected with the principal activity of manufacture, the deduction can certainly be allowed. However, if the principal activity is only of manufacturing drugs, it is difficult to infer the leasing of any machinery or premises as part of that activity. At any rate, the Tribunal also did not analyse and record a finding that the leasing was part of the prin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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