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C.I.T. Central - II, Calcutta Versus Kothari Plantation & Industries Ltd.

2015 (6) TMI 103 - CALCUTTA HIGH COURT

Replantation subsidy received from Tea Board - whether is to be taken into consideration for computing the profits of eligible business for the purpose of determining the deduction under Section 32AB ? - Held that:- In the present case, the Tribunal had found that the assessee was not entitled to deduction under section 32AB in respect of income from house property, dividend income, bank interest and long-term capital gains as these incomes did not form part and parcel of the business carried on .....

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I 1 - SUPREME Court). The submission as regards tax effect is also without any substance because the appeal preferred by the Revenue indeed related to other questions as indicated above but the appeal was admitted with regard to this question. Therefore, it cannot be said that even under section 268A and assuming everything in favour of the assessee, the appeal was incompetent going by the circular issued by CBDT, which was in force at the time when the appeal was preferred. - Decided in favour .....

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, 2014 on the following grounds: For that the Tribunal erred in law holding that the replantation subsidy received by the assessee from Tea Board is to be taken into consideration for computing the profits of eligible business for the purpose of determining the deduction under Section 32AB of the Income Tax Act, 1961 notwithstanding the specific provisions contained in clauses (a) and (b) sub-section (3) of Section 32AB of the said Act for computing the profits of eligible business. Mr.Agarwal, .....

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x under the head Profits and gains of business or profession , has, out of such income - He submitted that the applicability of section 32AB cannot even remotely be suggested to income which is not chargeable to tax. The question in the case is, whether the replantation subsidy received by the assessee is eligible for the benefit under section 32AB. He drew our attention to section 10(30) which provides as follows : in the case of an assessee who carries on the business of growing and manufactur .....

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low, a certificate from the Tea Board as to the amount of such subsidy paid to the assessee during the previous year. Section 10 enumerates income not includable in the total income. Clause 30 of Section 10 relates to replantation subsidy. He contended that the point was decided way back in the year 1993 by the Supreme Court in the case of Escorts Ltd.& Anr. v. Union of India & Ors. reported in (1993) 199 ITR 43 (SC) wherein Their Lordships held as follows : There is a fundamental, thoug .....

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pect of the same previous year in cluase (d) of the proviso to section 10(2)(xiv) of the 1922 Act and section 35(2)(iv) of the 1961 Act is to indicate that there is a basic scheme, unspoken but clearly underlying the Acts, that the two allowances cannot be and are not intended to be granted in respect of the same asset or expenditure. These provisions mandate that the assessee should, in a case where the assessee qualifies for both the allowances, be granted the special allowance for scientific .....

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ion used in the statute. It has to be reconciled and given its due meaning. The word eligible qualifying the business in clause (ii) of section 32AB(1) since defined in section 32AB(2)(i) seems to be the determining factor which cannot be ignored. Income from eligible business does not qualify as to under what head the income from eligible business would be eligible for deduction. In the absence of any qualification clause and use of the expression eligible business defined in section 32AB(1) ma .....

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ed the decision of the Gauhati High Court in CIT v. Dinjoye Tea Estate (P)Ltd.(1997) 224 ITR 263 is no more a good law in view of the decision in Apollo Tyres Ltd. v. CIT (2002) 255 ITR 273 (SC), following which the Calcutta High Court had expressed its opinion in Assam Brook Ltd. v. CIT (2004) 267 ITR 121. The Apex Court was clear in laying down the principle in Apollo Tyres Ltd. v. CIT (2002) 255 ITR 273 which cannot have a different meaning. The second submission advanced by Mr.Das was that t .....

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