TMI Blog1992 (11) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... n plant from which there was a loss although the total income was a positive figure ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that for computing the relief under section 80HH, income from lorry hire, weighment charge, miscellaneous receipts, income from fixed deposits, etc., should not be included as they were not income of the industrial undertaking ? (3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that deduction under section 80HH should be allowed in respect of the solvent plant on its income without setting off the loss incurred in respect of hydrogenation plant ? " The assessee is engaged in the business of extraction of oil, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rling Foods v. CIT [1984] 150 ITF 292 (Kar). In Sterling Foods' case [1984] 150 ITR 292 (Kar), it was held that, under section 80HH, the relevant profits should be 'derived' from the unit in question directly ; therefore, the income earned by the sale of import entitlement is outside the purview of section 80HH, even though the assessee earned the import entitlement by virtue of exporting the products of an industrial undertaking. The ratio of the said decision would equally govern the present case also. Re : Third question. -The Income-tax Officer set off the loss of the hydrogenation plant against the income from the solvent plant for the purpose of calculating the deduction under section 80HH. This view as affirmed by the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed as a deduction while computing the total income of the assessee , it there was no " profits and gains " available from that unit ( industrial undertaking) includible in the gross total income of the assessee, but the said unit suffered a loss, the benefit of section 80J would not be available. The question pertained to the mode of arriving at the profits and gains of the unit; the assessee, there, contended that depreciation and investment allowance should not be deducted while computing the profits and gains derived from the unit. This was, because, deduction of depreciation and investment allowance could be postponed while computing the gross total income ", having regard to sections 28, 29 and 32 of the Act in view o section 32A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the gross total income need not necessarily be considered while computing the profits and gains of one unit, for purposes of section 80HH. Under section 80HH, the relevant question is whether there is " profits and gains " derived from an industrial undertaking which was ultimately added to the gross income of the assessee. If there is any such profits and gains, the assessee is entitled to the benefit of section 80HH. If the loss sustained by another unit is set off against this profits and gains of an industrial undertaking, the resultant figure would not reflect the profits and gains of the said industrial undertaking in any sense, much less in a commercial sense ; it will be an unnatural and artificial " profits and gains " of tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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