9911796707
TMI Blog1999 (7) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... contentions have been heard and records perused. The only issue involved in this appeal is relating to the computation of deduction under section 80-I. It is not disputed that the assessee is entitled to deduction under section 80-I. Apart from deduction under section 80-I, the assessee has also claimed deduction under section 32AB. Deduction under section 80-I is permissible at 20% of the profits and gains of the industrial undertaking. In computing the eligible profits for deduction under section 80-I the Assessing Officer first allowed the deduction under section 32AB and thereafter calculated the deduction under section 80-I on the reduced income. The Commissioner of Income-tax (Appeals) has held that deduction under section 80-I is all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t making any deduction under section 32AB. 4. The learned counsel for the assessee, on the other hand, sought to support the order of the CIT (A). It was contended that a similar issue had come up before the Ahmedabad Bench of the Tribunal in the case of Samir Diamond Mfg. (P.) Ltd. v. Dy. CIT (1998) 61 TTJ (Ahd.) 413 and the same was decided in favour of the assessee. 5. We have given our careful consideration to the rival contentions. For appreciating the rival contentions it will be useful to reproduce the relevant provisions of the Act. 6. Section 80-I of the Income-tax Act, 1961 reads as under : - "80-I. (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Section 80AB reads as under : - "80AB. Where any deduction is required to be made or allowed under any section (except section 80M) included in this Chapter under the heading "C-Deductions in respect of certain incomes" in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of the Act. In this connection it may be relevant to refer to section 28 and section 29, which are relevant in computation of income of profits and gains of the industrial undertaking under the Act. 10. Section 28 of the Act reads as under : - The following income shall be chargeable to income-tax under the head "Profits and gains of business or profession" - (i)the profits and gains of any business or profession which was carried on by the assessee at any time during the previous year; (ii)any compensation or other payment due to or received by - "................" 11. Section 29 of the Act reads as under : - "29. The income referred to in section 28 shall be computed in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain deposits in accordance with the section or utilised any amount for the purpose of any new machinery or plant etc. It is therefore necessary to find out as to whether the investment under section 32AB has been made out of the profits and gains of business of the industrial undertaking eligible for deduction under section 80-I. If deduction has been claimed from the income of the industrial undertaking then the claim under section 32AB has got to be deducted from the profits and gains of business derived from the industrial undertaking which is included in the gross total income for purposes of deduction under section 80-I. On the other hand, if the assessee makes investment specified under section 32AB out of the income from business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32AB has been made out of the profits and gains of business other than the business of the industrial undertaking eligible for deduction under section 80-I, then deduction under section 32AB is not to be made for the purpose of determination of the profits and gains derived from the industrial undertaking and the deduction under section 80-I shall have to be computed on the profits and gains of the industrial undertaking without reducing it by the deduction under section 32AB. For this purpose we restore the issue to the file of the CIT(A), who will decide the issue afresh in accordance with our decision after doing necessary verification.
14. For statistical purposes the appeal of the revenue is allowed. X X X X Extracts X X X X X X X X Extracts X X X X
|
