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TMI Blog2002 (11) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... at the following sums could not be considered as part of "eligible business profit"; (i) Interest on intercorporate deposits Rs. 18,46,847 (ii) Dividend income Rs. 13,41,200 (iii) Income from house property Rs. 2,40,000 ------------- Rs. 34,28,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see argued that if the income from house property was to be excluded, the Assessing Officer should exclude the net income from house property and not the gross amount of rent received by the assessee. 6. The learned Departmental Representative argued that the judgment of Hon'ble Supreme Court in the case of Apollo Tyres Ltd. was of no assistance to the assessee because in that case the assessee concerned had been treated to be in the business of purchase and sale of units. It was not the case of the assessee that it was carrying on a business of purchase and sale of the units of UTI. The Learned DR argued that there were several authorities directly on the issue that were against the assessee. He relied upon the decision of the Tribunal reported in Asstt. CIT v. Northern India Theatres (P.) Ltd. and the judgments of Hon'ble Gauhati High Court reported in CIT v. Dinjoye Tea Estate (P.) Ltd. [1997] 224 ITR 263 and Hon'ble Calcutta High Court reported in CIT v. Warren Tea Ltd. [2001] 251 ITR 382. 7. The Learned D.R. also argued that the assessee had not established a case of the units having been acquired for the purpose of pledge with the banks before the authorities below. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing manner: "Therefore, we are of the opinion, the Assessing Officer while computing the income under section 115J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to the said section. To put it differently, the Assessing Officer does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to section 115J. The second question framed by us hereinabove arises for our consideration in the following factual background. The assessee-company in its books of account had shown certain sums of money representing "dividend" from units of the UTI and had included the said sums in the computation of its profit as income from "eligible business". It also claims that out of such income from "eligible business" it had purchased certain new machineries for its factory because of which it claimed a deduction of 20 per cent of the said income as provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee-company is in the course of its business and its business of manufacture and sale of tyres and sale and purchase of units of the UTI are common in nature and both the businesses are intertwined and interlaced. This finding is accepted by the High Court also. We also find that this business of the assessee-company of buying and selling of units is a business as contemplated under section 32AB of the Act. The question then is, is it an eligible business under the said section? The term "eligible business" is defined under sub-section (2) of section 32AB. As per that definition, all business of an assessee-company will be an eligible business unless it falls under the type of business enumerated in sub-clauses (a) and (b) of section 32AB. It is nobody's case that this business of the assessee-company is one of those businesses which fall under business enumerated in sub-clauses (a) and (b) of sub-section (2) of section 32AB. Therefore, there is no doubt that the business of the assessee-company is an eligible business. The fact that it is shown under different head of income would not deprive the company of its benefit under section 32AB so long as it is held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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