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2004 (5) TMI 13 - HC - Income TaxDeduction u/s 80HH and 80-I - Tribunal holding that deduction u/s 80HH and section 80-I on the income arising from brass scrap obtained in the process of breaking and dismantling of guns is not an income derived from the industrial undertaking of iron rerolling - In our opinion, there is no nexus with the brass scrap obtained on dismantling of the guns in the main activity of the appellant of steel rerolling. Gun is not the essential raw material of the appellant industrial unit, in any case brass is not at all connected with steel rerolling. Thus, separation of brass cannot be said to be in the process of manufacture or a product or a by-product of the activity of the assessee's industrial undertaking. There is no direct nexus with the separation of the brass from the guns to the main activity, thus, considering the provisions of sections 80HH and 80-I, it cannot be said to be profit and gain derived from industrial undertaking. Thus, deductions on profits and gains under sections 80HH and 80-I are not admissible and have been rightly disallowed by Tribunal.
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