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2004 (8) TMI 68 - HC - Income TaxDeduction u/s 80I - Whether Tribunal was right in giving deduction under section 80-I amounting to Rs. 1,50,733 received as compensation from insurance company against loss of raw material in fire? - Revenue submitted that the expression "derived from an industrial undertaking" used in section 80-I(1) could not include an amount received on account of insurance claim. - while computing the profits of the industrial undertaking for the purposes of deduction under section 80-I, what has to be excluded is not the gross receipt but the income arising out of this receipt. Such income can only be computed by deducting the cost of raw material destroyed in fire from the gross receipt of insurance claims. The raw material had been admittedly purchased during the year under consideration and its cost debited in the purchase account of the year. - Accordingly, the question is answered in the negative, i.e., in favour of the Revenue and against the assessee. However, in view of the observations made above, the Tribunal will compute the profit attributable to the receipt of insurance claim and exclude only such profit out of the total income for working out the u/s 80-I
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