TMI Blog2013 (10) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... Board, Department of Atomic Energy, Government of India, a Division Bench has opined that the appellant-assessee would be entitled to benefit under Section 80-I in respect of service charges received and the same were profits and gains derived from an industrial undertaking – Decided in favor of Assessee. Whether equipment hire charges; crane hire charges; Ammonia Tanker hire charges are eligible for deduction u/s 80-I of the Income Tax Act – Held that:- To examine whether the income was derived from an industrial undertaking, it is imperative to trace the source of profit or income to manufacture/production. Transportation, is post-manufacture and takes place after the goods or articles have been manufactured in the industrial undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 2006 in the case of the appellant, reported as (2008) 300 ITR 92 (Delhi), service charges, equipment hire charges and interest on loans to employees, it was held would not be entitled to special deduction under Section 80-I of the Income Tax Act, 1961 (Act, for short). On an appeal filed by the appellant-assessee, the Supreme Court remanded the case to the tribunal in respect of service charges. Insofar as equipment hire charges and interest on loan to employees were concerned, the same were not pressed having regard to the small amount involved. The order dated 6th September, 2011 records; whether earlier decision reported in (2008) 300 ITR 92 (Delhi) would be applicable or not, was a question, which would be examined at the time of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaking . Learned counsel for the appellant has submitted that a wrong factual statement was made by the appellant that the carriage wagons were owned by the Railways. He submits that carriage wagons were owned by the appellant and ammonia had to be transported to the consumer/customer in the specialised container wagons. Ammonia had to be transported in highly compressed and liquefied form. 5. Paragraph 14 of order dated 23rd April, 2012 in ITA No. 955/2008 reads as under:- 14. Tank hire charges were received by the appellant-assessee from the consumers to whom Ammonia was supplied. It represents payment for transportation. On query, it is accepted/stated by the appellant that these tank hire charges were separately billed and these t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or gains from any other commercial activity undertaken by the assessee. Section 80-I specifically refers to and covers profit and gain derived from an industrial undertaking. Sub-section (2) stipulates that the industrial undertaking should manufacture or produce an article or thing as specified. Thus, the emphasis is on the profits and gains of the industrial undertaking, which manufactures or produces an article or thing as specified. Transportation of ammonia, as in case of other products, may require specialised container vessels or wagons/transport vehicles, but the income derived would be earned from transportation. Transport charges were specifically and separately paid, would not be income or profits derived from an industria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as if such eligible business is the only source of income of the assessee. Therefore, the devices adopted to reduce or inflate the profits of eligible business has got to be rejected in view of the overriding provisions of sub-section (5) of Section 80-IA, which are also required to be read into Section 80-IB. [See Section 80-IB(13).] We may reiterate that Sections 80-I, 80-IA and 80-IB have a common scheme and if so read it is clear that the said sections provide for incentives in the form of deduction(s) which are linked to profits and not to investment. 34. On an analysis of Sections 80-IA and 80-IB it becomes clear that any industrial undertaking, which becomes eligible on satisfying sub-section (2), would be entitled to deduction und ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
