TMI Blog1995 (3) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,400 . (e) Commission on unit trust 13,575 . (h) Share transfer fee 8 21,045 . . 7,56,517 Accordingly he computed the deduction only in a sum of Rs. 8,77,946 as against the claim of Rs. 10,29,000 for the asst. yr. 1989-90 3. For the asst. yr. 1990-91, the Assessing Officer excluded the following amounts and computed the deduction under s. 32AB as follows: . Rs. Rs. Amount of profit as per assessee's computation . 1,18,28,632 Add : Depreciation debited . 63,042 . . 1,18,91,674 Less : Income not related to eligible business— . . Interest income from investment 8,27,804, . Other interest 7,01,246, . Share transfer fee 10 . Under miscellaneous income—sale of coconut 6,291 . Sale of old materials 6,609, . Sale of windows 2,459, . Sale of old tyres 2,000, . Commission on purchase of railway lands 2,400, . . 15,70,419 . Depreciation admissible 2,50,375 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business income as computed under the IT Act whereas under s. 32AB, what is to be allowed is 20% of the profits of eligible business. He contended that if the intention was to allow the deductions only in respect of the business income as computed under the IT Act, then, the section would have stated so, as in the case of s. 32AB." The CIT(A) was in agreement with the above contentions and allowed the claim of the assessee. 6. The assessee is in appeal against the order of the first appellate authority for the asst. yr. 1989-90 restricting the claim of deduction under s. 32AB of the Act as computed by it. The Revenue is in appeal against the order of the first appellate authority for the asst. yr. 1990-91 in upholding the claim of deduction under s. 32AB as computed by the assessee. 7. We have heard rival submissions and perused the records. We are in agreement with the decision of CIT(A) rendered for the asst. yr. 1990-91. In Apollo Tyres Ltd. vs. Dy. CIT (1992) 44 TTJ (Coch) 534 : (1992) 43 ITD 464 (Coch), it was held by the Tribunal as follows: "From the language of s. 32AB(1) and the Board's Circular No. 461, dt. 8th July, 1986 issued thereunder, it is clear that inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f UTI was not warranted in terms of s. 32AB(3). As both the activities constituted same business which was an eligible business, provisions of s. 32AB(3)(b) were not applicable. Therefore, for the purpose of working out the deduction, rather more specifically in computing 20% of the eligible profit, the income from the units of UTI should also be considered along with other income subject to adjustments prescribed therein." In the light of the above decision, it has to be seen first whether the amount representing the investment deposit or the purchase of a new asset or a plant has come out of the income chargeable to 'profits and gains of business or profession'. At this stage the incomes which are assessed under any other head should not be taken into account but are to be only excluded. This exclusion is only to quantify the amount of investment deposit or the amount utilised for the purchase of new machinery or plant from out of the income chargeable under the head "profits and gains of business". There is no dispute on this. Once this amount is quantified, the assessee becomes eligible to claim the deduction. The deduction to be allowed is in— (i) a sum equal to the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions: (a) Eastern Investment Ltd. vs. CIT (1951) 20 ITR 1 (SC); (b) Bengal Assam Investors Ltd. vs. CIT (1966) 59 ITR 547 (SC); (c) Michel A. Kallivayalil vs. CIT (1976) 102 ITR 202 (Ker); and (d) Brooke Bond Co. Ltd. vs. CIT (1986) 57 CTR (SC) 25 : (1986) 162 ITR 373 (SC). These decisions are on a totally different context and they have nothing to do with the definition of profits of eligible business as given in sub-s. (3) of s. 32AB of the Act. For these reasons we allow the ground of appeal of the assessee in relation to s. 32AB and reject the Department's ground of appeal on the same issue. 9. The next two grounds of appeal are confined to the asst. yr. 1989-90 and they are as follows: "The learned CIT(A) also erred in confirming the computation of capital loss made by the assessing authority. The determination of loss at Rs. 27,188 is apparently wrong. The addition of Rs. 50,700 made by the assessing authority and confirmed by the first appellate authority while determining income from other sources is also not in order; since the interest accrued has been already considered for the purpose of working out the cost." 10. The assessee purchased some d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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