TMI Blog2005 (7) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... rward unabsorbed investment allowance and thereafter rejected the claim of the assessee on the ground that there was no positive profit for grant of deduction under section 32AB. According to the learned counsel, deduction under section 32AB should be computed before setting off of carried forward unabsorbed investment allowance. 3. On the contrary, Mr. K. Srinivasan, the learned Departmental Representative (D.R.) submitted that deduction under section 32AB could be allowed on the income computed as per provisions of sections 28 to 32A. Therefore, the carried forward investment allowance has to be first set off before grant of deduction under section 32AB. Once the carried forward investment allowance was set off there is no business income for the assessee for grant of deduction under section 32AB, therefore, the assessee is not entitled to deduction under section 32AB. 4. We have considered the rival submissions on either side, also carefully gone through the order of the lower authorities and perused the material available on record. As rightly submitted by the learned D.R., the total income for the purpose of deduction under section 32AB has to be computed as per the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). In the case before the Madras High Court, the assessee purchased bottles which were used as container for soft drinks and beverages. Each bottle was considered as an independent and separate unit for the purpose of usage. On those factual circumstances, the Madras High Court held that each bottle is an independent plant. In this case, the brick cannot be used independently for any independent function or usage. As rightly submitted by the learned D.R., it may be one of the materials for the purpose of construction of an asset. Therefore, in our opinion, the assessee is not entitled to depreciation as claimed. We do not find any infirmity in the order of the lower authority. Accordingly, we confirm the same. 8. In the result, the appeal filed by the assessee for the assessment year 1988-89 in I.T.A. No. 2781 (Mad.)/95 stands dismissed. However, there will be no order as to cost. 9. Let us now take I.T.A. Nos. 1257 2165 (Mad.)/96 and 804(Mad.)/97. These appeals of the assessee are for the assessment years 1992-93, 1993-94 and 1994-95. The first issue arises for consideration is regarding depreciation consequent to assessment under section 115J. During the course of hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re sticky in nature cannot be included in the total income. By respectfully following the judgment of the Supreme Court in the case of UCO Bank ( supra ) and the reasons stated by this Tribunal in the case of India Equipment Leasing Ltd. ( supra ), in our opinion, the deemed income which are sticky in nature cannot be included in the total income. Accordingly, we set aside the order of the lower authority on this issue and direct the Assessing Officer to delete the abovesaid amount while computing the taxable income. 13. The next issue arises for consideration is regarding expenses for earning dividend. We heard both the representatives of the assessee and the Revenue. The CIT(A) estimated the expenditure for the purpose of earning the interest at 25%. The learned counsel for the assessee submitted that on identical set of facts, this Tribunal estimated 2% of the gross dividend as reasonable expenditure. However, the learned D.R. submitted that he is placing his reliance on the observation made by the lower authorities. 14. Admittedly, an identical set of facts, this Tribunal estimated 2% of gross dividend for the purpose of deduction under section 80M. In this case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. ( supra ), we do not find any infirmity in the order of the lower authority. Accordingly, we confirm the same. 19. The next issue is regarding higher depreciation on leased vehicle. We heard both the representatives of the assessee and the Revenue. It is very fairly conceded that in view of the Madras High Court in the case of CIT v. Madan Co. [2002] 254 ITR 445 , the assessee is entitled to higher rate of depreciation on the leased vehicle. In view of the judgment of the Madras High Court in the case of Madan Co. ( supra ), we do not find any infirmity in the order of the lower authority. Accordingly, we confirm the same. 20. The next issue is regarding short-term capital loss. The first Appellate authority found that consequent to the order for the assessment years 1992-93 and 1993-94, the effect of capital loss carried forward and set off should be allowed by the Assessing Officer. It was very fairly conceded by both the representatives of the assessee and the Revenue that it is only a consequential to the earlier order. In view of the above, we do not find any infirmity in the order of the lower authority. Accordingly, we confirm the same. 21. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the sales tax authorities that the detonator sold by the assessee was subjected to lower rate of sales tax. In spite of this contention, the assessee proceeded to collect 4% extra in the name of deposit. On those factual circumstances, the Madras High Court, after considering the judgment of the Supreme Court in the case of Chowringhee Sales Bureau (P.) Ltd. ( supra ), observed as follows : "The true character of the receipt must be judged with reference to the reasons for the collection and liability for meeting which the collection was made. When the liability is a statutory liability, which the assessee was required to meet and for meeting which it was by the statutes or authorities permitted to collect the amount required from its customers, the true character of the collection is a trading receipt. By calling a portion of the deposit, it cannot be said that the assessee had constituted itself as a trustee, and therefore, the amounts received were not required to be regarded as part of its trading receipt." Therefore, it is very clear that the true character of the receipt has to be judged with reference to the reason for collection. In this case, admittedly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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