TMI Blog2015 (2) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal has given cogent and convincing reasons in arriving at the conclusion and we are in complete agreement with the view taken by the Tribunal. In our view, the income of the assessee is a business income. Apart from that, learned advocate for the appellantrevenue is not in a position to show how the findings of the CIT (A) and Tribunal are bad in law and on facts. - Following decision of assessee's own previous case [2015 (1) TMI 438 - GUJARAT HIGH COURT] - Decided against Revenue. - TAX APPEAL NO. 163 of 2000 With TAX APPEAL NO. 164 of 2000 With TAX APPEAL NO. 165 of 2000 - - - Dated:- 2-12-2014 - MR. KS JHAVERI AND MR. K.J.THAKER, JJ. FOR THE APPELLANT : MR KM PARIKH, ADVOCATE JUDGEMENT Per: K S Jhaveri: 1. By way of these appeals, the appellantrevenue has challenged the common order dated 24.09.1999, passed by the Income Tax Appeal Tribunal, Ahmedabd, in W.T.A. Nos. 1063/Ahd/94, 1063/Ahd/94 and 1065/Ahd/94, whereby the appeal filed by the assessee were allowed by the Tribunal. 2. While admitting these appeals, the Court had formulated the following substantial question of law: Whether on the facts and in the circumstances of the case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the Commissioner of Income Tax as well as the Tribunal have committed error in allowing deduction under Section 32AB on the income from lease rent as also on interest income on debentures treating both the item as business income. He further submitted that the Tribunal as well as the CIT(A) have not properly appreciated the material on record. Therefore, he urged that the present appeal deserves to be allowed. 5. Learned counsel for the appellant has taken us through the order of the Assessing Officer wherein it has been held that since the main object of the company is to carry on the business of manufacturing, purchasing, selling refining etc, of sodium and other chemicals by no stretch of imagination it can be stated that by giving on rent a factory in which the assessee itself was partner, which was manufacturing shoe polish, and which had been given on rent from the first day of its incorporation would help the assessee in manufacturing or even trading of sodium and its byproducts . 6. We have heard learned advocate appearing for the appellant and perused the material on record. The CIT(A) while deciding the appeal has discussed the facts of the case and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omputed in accordance with the provisions of subsection (1) of section 32 from the amounts or profits computed in accordance with the requirements of paras II and III of the (Schedule VI) to the companies Act, 1956 (1 of 1956) (as increased by the aggregate of: (I) the amount of depreciation; (ii) the amount of income tax paid or payable, and provisions therefore; (iii) the amount of surtax paid or payable under the Companies (profit) Surtax Act, 1964 (7 of 1984) (iv) the amounts carried to any reserve, by whatever name called; (v) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities; (vi) the amount by way of provisions for losses of subsidiary companies; and (vii)the amount to amounts of dividends paid or proposed If any debited to the profit and loss account, and a reduced by any amount or amounts withdrawn from reserves or provisions, if such amounts are credited to the profit and loose accounts; 4.3. Now reference to Circular No.461 dated 9.7.86, 161 ITR 24 (St.) wherein, the provisions of Section 32AB has been explained reads as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The reasons was that by definition 'eligible business' was not confined to manufacture or production. Moreover, interhead and intrahead adjustments are the cardinal features the assessee the accounts had been prepared in accordance with part II and part III of sixth schedule to the Companies Act as was the mandate in Section 32AB(3). From the accounts so prepared the income from units of UTI profits or loss on the sale of units were considered before ascertainment of the net profit of the undertaking. From such profit the adjustment envisaged in Section 32AB(3) was to be given effect to. Moreover, these two activities of the assessee had to be construed as forming part of the same business as there was one account for all the funds which were intertwined and interlaced with each other, and the business as conducted under a common management. In Section 32AB(3) or in Section 32AB(1) (ii) the expression 'Chargeable to profits and gains of business' is conspicuous by its absence. Hence, the dichotomy as between the income from manufacture and income from units of UTI was not warranted in terms of Section 32AB(3). As both the activities constituted same business which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rightly held that the facts of the case clearly indicated that the assessee wanted to exploit the asset as a commercial asset for commercial gain. It is further to be noted that leasing out had been done in the accounting year 1988-1989 and for the preceding assessment years, the assessee had shown the lease rent as business income, and the same had been accepted by the A.O. The Tribunal further held that the principle of res judicata was admittedly not applicable to the Income Tax Proceedings. 8. In view of the aforesaid discussion, we are of the opinion that the CIT(A) as well as the Tribunal has given cogent and convincing reasons in arriving at the conclusion and we are in complete agreement with the view taken by the Tribunal. In our view, the income of the assessee is a business income. Apart from that, learned advocate for the appellantrevenue is not in a position to show how the findings of the CIT (A) and Tribunal are bad in law and on facts. 9. In that view of the matter, we do not find any error in the order of the Tribunal. Hence, the present appeal is dismissed. Accordingly, both the question of law are answered in favour of the assessee and against the reve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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