TMI Blog1980 (1) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... out without setting off the brought forward loss from the earlier years for the assessment year 1968-69 ? 4. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee should be allowed the relief under section 80-I for the assessment year 1969-70, since there is a positive income ? " The assessee is a company manufacturing motor cars. The first of the assessment years under consideration is 1965-66 for which the previous year is the calendar year. In that year, the assessee claimed the relief admissible to priority industry in accordance with the Finance Act, 1965, First Schedule, Pt. I, Para. F, read with Pt. III. The ITO rejected this claim for rebate at the rate of 35% on the ground that automobiles were not listed and that the manufacture of internal combustion engines, automobile ancillaries, gear and roller bearings were all part of manufactured automobiles so that such manufacture of automobiles did not fall within the relevant provisions. The AAC, on appeal, rejected this contention. In his view, if the assessee were to claim the relief admissible as a manufacturer of internal combustion engines, etc., it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction of ships or in the manufacture or processing of goods or in mining, graded rebates are given. For instance, rebate is given on so much of the income as consists of profits and gains attributable to the business of generation or distribution of electricity or of construction, manufacture or production of any one or more of the articles or things specified in the list in Pt. III to the First Schedule to the Finance Act. The rate of 35 per cent. is applicable to so much of the profits or gains attributable to the manufacture of one or more of the articles specified in Pt. III as did not exceed Rs. 10 lakhs. If the income exceeded Rs. 10 lakhs, then the rebate was reduced to 26 per cent. Part III of the Finance Act contains several entries. We are concerned with entries Nos. 5, 21 and 23, which run as follows: " 5. Boilers and steam generating plants, steam engines and turbines and internal combustion engines. 21. Automobile ancillaries. 23. Gears. " The claim of the assessee is that the articles manufactured by it fall under one or the other of these items, the internal combustion engines falling within item 5 and the other articles under item 21 or 23. The learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utable to the manufacture of the listed articles can be worked out. We consider that there is merit in this contention of the assessee. While making up the cost of the automobile, the assessee would be giving some unit price for each one of the items that go into its manufacture. Some parts may be produced by the assessee, as here, and some others may be purchased by it. With reference to the parts purchased, the price paid by the assessee would be its cost. As far as the other items are concerned, the assessee would be attributing some value to the spare parts used and that would furnish the basis for arriving at the profits attributable to the manufacture of the particular article. At any rate, by imagining some difficulties in accounting, the exemption granted by Parliament cannot be denied. The taxing authority cannot get out of its obligation to work out the statutory provisions by throwing up its hands in imaginary despair. The expression " attributable to " is not peculiar to this part of the law. The expression occurs in other sections also. For instance, the same expression found a place in s. 42 of the Indian I.T. Act, 1922, which corresponds to s. 9(1)(i), Expln, (a), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in accordance with and subject to the provisions of this section, a deduction from such profits and gains of an amount equal to eight per cent. thereof, in computing the total income of the company." For this year, the only additional feature to be introduced is the expression priority industry which is defined in s. 80B(7) as meaning the business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the list in the Sixth Schedule. There is in substance no difference, and for the same reason for the earlier years, the assessee is eligible for the benefit of the relief in respect of the profits attributable to the items falling within the relevant Schedule to the I.T. Act. Therefore, the second question is also answered in the affirmative and in favour of the assessee. The third question arises on the following facts. In the assessment for the assessment year 1968-69, the assessee claimed the relief under s. 80-I on the basis of the profits attributable to the manufacture of the relevant items falling within the appropriate Schedule before adjustment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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