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2015 (2) TMI 506 - CALCUTTA HIGH COURTDeduction u/s 80IC - Tribunal held that the "interest income" earned by the Appellant/Petitioner cannot be said to be "derived by" the eligible undertaking/units as required for claiming deduction - Held that:- The said section 80IC postulates gross total income of an assessee shall include any profits and gains derived by an undertaking from any business referred to in sub-section(2)to be entitled to a deduction from such profits and gains as specified in sub-Section (3). Sub-section(2) applies to any undertaking which has begun or begins to manufacture or produce any article or thing. To our mind the facts of this case where the assessee has earned income from fixed deposits which deposits were profits and gains of the undertaking, the income obtained as interest on such profits and gains cannot be said to be derived from the business of manufacture or production of any article or thing by the assessee's undertaking.- Decided against the assessee. Deduction on account of scraps sale T&M Fee under Section 80IC allowed - expression "derived by" v/s "Attributable To" - Held that:- To say that the scrap materials has no direct link or nexus with the industrial undertaking cannot be at all be expected or commend acceptance. For the sake of emphasis, we may say that the scrap materials come within the manufacturing process of the industrial undertaking in the manufacture of certain products such as V-Belts, oil seals, O-Rings and certain rubber moulded products, etc. Thus profits and gains from the sale of scrap materials is eligible to deduction in an amount equal to twenty per cent under S. 80HH, inasmuch as such gains or profits are derived from the industrial undertaking and includible in the gross total income of the assessee. See Fenner (India) Ltd. Versus CIT [1998 (4) TMI 67 - MADRAS High Court] - Decided in favour of the assessee.
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