TMI Blog2006 (7) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... "(i) Whether on a correct and proper interpretation of the provisions of Section 80-IA of the Act and application thereof to the facts and circumstances of the case, was the Tribunal legally correct in holding that the claim of deduction U/s 80IA in respect of Interest Income and income by sale of import licences derived from its business, made by the appellant was not sustainable. (ii) Whether on the facts and in circumstances of the case, the Tribunal has misdirected itself in law and as well as on facts in holding that the appellant was not entitled to deduction u/s 80-IA of the Act claimed by the assessee. (iii) Whether the finding returned and recorded by the Tribunal while holding that appellant was not entitled to deduction u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea food, which was exported. It also earned some income from the import entitlements granted by the Central Government under the Export Promotion Scheme. The assessee was entitled to use the import entitlements itself or sell the same to others. The assessee claimed relief under section 80-HH in respect of sale proceeds of import entitlements. The Tribunal held that relief could not be granted. The Hon'ble Apex Court reversing the decision of the High Court thrown light on the word "derive from" and held there must be direct nexus between profit and gains of the industrial undertaking. As the nexus was only incidental and not direct, the receipts from the sale of import entitlements could not be included in the income of the assessee for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been committed by the Tribunal in rejecting the claim of the assessee on account of deductions claimed under Section 80-IA of the Act. We concur with the reasons given by the Tribunal while rejecting the claim of the assessee. For arriving at the decision, the authorities below have relied upon the principles of law laid down in judgment of Hon'ble the Supreme Court of India in Sterling Foods' [1999] 237 ITR 579 case which is directly on the issue, where in it was held as under (headnote) : "The word "derive" is ususally followed by the word "from" and it means: "get, to trace from a source; arise from, originate in, show the origin or formation of". The source of import entitlements could not be said to be the industrial und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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