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2015 (4) TMI 480 - HC - Income TaxDeduction u/s 80IA - Sale of advance licenses issued under Chapter-VII of the Import Export Policy for asst. year 1993-94 - treatment as Income derived from industrial undertaking for calculating allowance u/s.80IA of the I.T. Act - Held that:- Section 80-IA provides that the gross total income of an assessee would include any profits and gains derived from any business of an industrial undertaking and not from industrial undertaking as provided for in Section 80HH. In our opinion, the gross total income of an assessee, so far as Section 80-IA is concerned, means any profits and gains derived from any business of an industrial undertaking. By making the slight change in the language, the Legislature, as a matter of fact, has widened the scope of Section 80-IA than Section 80 HH, but while reading the expression the gross income derived from any business, in our opinion, cannot be read to mean and include the income having no nexus with the business of an undertaking or the income that cannot be attributable to the business of an undertaking. There must be, for the application of the words derived from, direct nexus between the profits and gains and the business of an industrial undertaking. In the instant case, the profit derived from sale of the license could be, at the most treated as incidental and not direct. In the present case, it is not the case of the assessee that sale of the license is their business. If the assessee has derived any profits/gains from the sale of license, it at the most could be treated as income from sources other than the actual conduct of the business and the same, in any case, cannot be treated as a part of gross total income from their business of manufacturing rubber moulded goods such as rubber rings and sale of the same. The submission that the sale of license has direct nexus/connection with the business of the undertaking must be rejected. Merely because the license was obtained for procuring the raw material for manufacturing finished products for its exports, does not mean that the sale of advance license has nexus with the business of manufacturing and sale of finished product. - Decided against the appellant.
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