TMI Blog2005 (3) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessing Officer was justified in including the amount relating to excess of recovery on account of advertisement over expenditure in computation for deduction under section 80-I - - - - - Dated:- 1-3-2005 - Judge(s) : D. A. MEHTA., MS. H. N. DEVANI. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.- As can be seen from the statement of case, a consolidated reference is made incorporating reference at the instance of the assessee as well as reference at the instance of the Revenue. In the circumstances, the registry is directed to register the reference at the instance of the Revenue as Income-tax Reference No. 59-A of 1993. Income-tax Reference No. 59 of 1993: The following five questions have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the Appellate Tribunal was right in law in holding that interest including bank interest earned by the assessee was not liable to be included in the computation of deduction under section 80-I of the Act?" Mr. S.N. Soparkar, learned senior advocate appearing on behalf of the applicant-assessee, states that he does not press the reference at the instance of the assessee, under instructions. The reference is returned unanswered. Income-tax Reference No. 59-A of 1993: At the instance of the Revenue, the following question of law has been referred by the Income-tax Appellate Tribunal: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the Assessing Officer was justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the assessment originally framed under section 143(3) of the Act, the said amount was claimed by the assessee as being profit derived from business and entitled to be taken into consideration for computation of deduction under section 80-I of the Income-tax Act, 1961. The Commissioner of Income-tax initiated revisional action under section 263 of the Act and held that such excess of recovery was not relatable to the business of the assessee and was not entitled to deduction under section 80-I of the Act. The assessee carried the matter in appeal before the Tribunal and succeeded before the Tribunal. Mr. Tanvish U. Bhatt, learned standing counsel appearing on behalf of the applicant-Revenue, submitted that such a large scale activity o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors were directly related to net sales of the detergent powder made by the consignee distributors. The Tribunal has also taken into consideration the converse situation, namely, in a case where if the expenditure had exceeded the recoveries, whether the difference arising on excess of expenditure over recoveries would have been allowed as business expenditure referable to the activities of the industrial undertaking, and answered the question by holding that it had direct nexus with the activities of the industrial undertaking. In the light of the aforesaid findings recorded by the Tribunal, it is not possible to accept the contention raised on behalf of the applicant-Revenue that the activity amounted to a different business altogether. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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