TMI Blog2006 (10) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... allowability of deduction under section 80-IA of Income-tax Act, 1961 (in short the Act ). Since the appeals relate to the same assessee and involve common issue, they have been clubbed and heard together and are being disposed of by way of a consolidated order for the sake of convenience and brevity. 2. Before us Shri R.K. Goyal learned Departmental Representative appeared for the department whereas Shri Krishan Kumar Mehta, learned counsel appeared on behalf of the respondent assessee. Their submissions have been considered while disposing of the impugned appeals. Since the facts are similar for all the three assessment years, we take up for discussion the facts in relation to the assessment year 1997-98 to understand the controversy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the gross total income of the assessee included profits and gains derived from its industrial undertaking. According to the assessee there was no specific requirement under section 80-IA of the Act that only profits derived from manufacturing activity are eligible for deduction under section 80-IA of the Act. In support the assessee relied upon the judgment of the Madras High Court in the case of CIT v. Ashok Leyland Ltd. [1981] 130 ITR 900 . The Assessing Officer did not accept the pleas of the assessee. According to the Assessing Officer an income may fall within the head Business income but insofar as its eligibility for deduction under section 80-IA is concerned, it is only the income derived by the assessee from the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the words any business in section 80-IA of the Act, and therefore, the trading profits were also eligible for deduction under section 80-IA of the Act provided the same are assessable as business income . Against the aforesaid decision of the CIT(A), the revenue is in appeal before us. 4. Before us the learned Departmental Representative Shri R.K. Goyal made brief submissions. According to him, the issue in question has since been adjudicated by the Hon ble High Court of Punjab Haryana in the case of Liberty Shoes Ltd. [ITA No. 140 of 2005] vide its order dated 17-8-2006 whereby it has been held that an assessee would not be entitled for deduction under section 80-IA to the Act in respect of profits derived from business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Our attention has been drawn to the language of the section 80-IA in the course of the arguments. According to the learned counsel due to the hanged phraseology of section 80-IA the same has to be taken as more liberal so as to consider within its ambit all business receipts of an industrial undertaking. In this regard, more particularly, the learned counsel pointed out the difference in wording of sections 80-I and 80-IA as follows. In section 80-I the expression used is any profits and gains derived from an industrial undertaking "whereas in section 80-IA the expressions used is any profits and gains derived from any business of an undertaking". It was therefore emphasized that section 80-IA uses as additional expression that is any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival submissions carefully. At the outset we may state that in view of the authoritative decision of the Hon ble jurisdictional High Court in the case of Liberty Shoes Ltd. ( supra ), the issue before us is liable to be decided against the assessee and in favour of the revenue. The controversy before us revolves around as to whether or not the profits derived by the assessee from trading activity would constitute profits and gains derived from the industrial undertaking for the purposes of section 80-IA of the Act. The industrial undertaking of the assessee business of sale and manufacture of yarn. The stand of the assessee is that in view of the presence of the expression any business the profits from all kind of activity, even other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such profits be considered as a part and parcel of the profits derived from the business of industrial undertaking. In our view, the provisions of section 80-IA of the Act when read as a whole do not leave any scope for ambiguity that it is only the profits and gains derived from the actual conduct of business of an undertaking i.e., carrying on of manufacture of production of articles or things which alone are eligible for claim of deduction under section 80-IA of the Act. Moreover, in view of the authoritative pronouncement of the Hon ble jurisdictional High Court in the case of Liberty Shoes Ltd. ( supra ) it is to be held that deduction under section 80-IA of the Act will not be eligible in respect of profits derived from the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
