TMI Blog1997 (6) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of weighment charges and interest receipts included in miscellaneous receipts? " The brief facts giving rise to this reference are that the assessee is a limited company deriving income from manufacturing of rice-bran oil, rice-bran oil extraction obtained in the manufacturing process apart from trading business in the above items such as extraction, soap stock, soyabean oil, mahua oil extraction, etc. While completing the assessment, the Assessing Officer noticed that the assessee has received power subsidy amounting to Rs. 1,45,526 which has been claimed to be exempt as being a capital receipt. We are not concerned in the present case with the issue of power subsidy. We are concerned with the fact that the Assessing Officer f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax (Appeals) have negatived the contention of the assessee. However, the Tribunal has reversed the finding and held that these receipts are connected with the activity of business of the assessee and the assessee is entitled for benefit under sections 80HH and 80-I of the Act of 1961. Sections 80HH and 80-I both very expressly lay down that " where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking . . . . ., there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent. thereof ". The words " derived from an industrial u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaking " has to be considered to mean essential trade activity of the assessee and not otherwise. The word " derive " means derived from industrial activity and industrial activity means the business in which industry is involved. In the present case, the industrial undertaking is involved in the business of oil extraction and not in the business of letting out the weighing machine for consideration and in granting loans on interest. Therefore, both the activities are not essential part of the activities of the assessee undertaking; and as such, the Assessing Officer and the Commissioner of Income-tax (Appeals) rightly approached the matter and the view taken by the Tribunal is erroneous and has to be set aside. Hence, we answer the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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