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2016 (8) TMI 112 - HC - Income TaxDeduction u/s 801A - non deduction of amount of subsidy given by the government to the farmers, for the purpose of allowing deduction u/s 801A - Held that:- The issue is squarely covered by the decision of the Hon’ble Supreme Court in case of Commissioner of Income Tax versus Meghalaya Steels Ltd. [2016 (3) TMI 375 - SUPREME COURT ] wherein the Hon’ble Supreme Court by placing reliance on the decision in case of CIT versus Sterling Foods [1999 (4) TMI 1 - SUPREME Court] lays down a very important test in order to determine whether profits and gains are derived from business of an industrial undertaking. There should be a direct nexus between such profits and gains and the industrial undertaking or business. Such nexus cannot be only incidental. Therefore the Tribunal has rightly held that the assessee is entitled for deduction under Section 801A of the Income Tax Act, 1961 without deducting the amount of subsidy given by the Government to the farmers and accordingly allowed the claim of the asseessee. We therefore answer the question in favour of the assessee and against the revenue.
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