TMI Blog1978 (2) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ? (2) Whether, on the facts and in the circumstances of the case, the assessee is entitled to the deduction of ₹ 98,676 and ₹ 18,735 transferred by it to the ' development reserve ' account and to the ' tariff and dividend control reserve ' account respectively for the assessment year 1969-70 and ₹ 68,288 transferred by it to the ' development reserve ' account, for the assessment year 1970-71 ? (3) Whether, on the facts and in the circumstances of the case, and in view of the provisions of the Electricity (Supply) Act, 1948, the assessee is entitled to relief under section 80-I not only in respect of the business income but also in respect of income derived by it from investments in securiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking received a sum of ₹ 17,791 for the assessment year 1969-70 and ₹ 14,741 for the assessment year 1970-71, by way of interest on securities. The assessee claimed the benefit of 8% deduction under s. 80-I of the Act on these receipts as well. It was contended by the assessee that since it was under a statutory obligation to invest the amount appropriated by it to the contingencies reserve in approved securities and since it could not carry on the business of distribution of electricity without complying with that statutory obligation, interest arising from such investments in approved securities should be considered as attributable to the profits and gains of priority industry within the meaning of that section qualifying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of electricity or of any other form of power. Thus the deduction is possible only in respect of profits and gains arising from the specific activities or business of generation or distribution of electricity or any other form of power. The immediate source of income in this case is the investments in Government securities. This investment and the realisation of interest has no direct bearing on the business of generation, or distribution of electricity of the assessee. The Tribunal was of the view that since the investment on Government securities was a statutory obligation there was a direct relationship between the income derived by the assessee by way of investment in securities and the carrying on of the business of distribution of elec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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