Profits attributable to priority industry require direct nexus; quarrying limestone alone did not qualify for section 80-I relief.

Section 80-I relief requires profits to be directly and proximately connected with a priority industry, because "attributable to" is broader than "derived from" but still demands a real nexus. On the admitted facts, the assessee was quarrying limestone, while the material used in cement manufacture was lime, and the record did not show an integrated manufacturing process or any priority-industry activity yielding the claimed profit. Mere book entries or self-consumption of limestone were insufficient to establish attributable income. Deduction under section 80-I was therefore not available.

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Issues: Whether, on the facts and circumstances, the assessee had profits attributable to a priority industry so as to qualify for deduction under section 80-I of the Income-tax Act, 1961.

Analysis: The expression "attributable to" in section 80-I is of wider import than "derived from", but it still requires a direct and proximate connection between the profits and the business of the priority industry. Section 80B(7) defines a priority industry as the business of construction, manufacture or production of specified articles or things, and the statutory relief is available only where the gross total income includes profits and gains so connected. On the admitted facts, the assessee was quarrying limestone, while the material actually used in cement manufacture was lime. The record did not show any integrated or continuous manufacturing process from which both lime and limestone emerged, nor any real business activity of a priority industry yielding the claimed profit. A mere estimated book entry for limestone and self-consumption did not establish attributable income.

Conclusion: The assessee was not entitled to deduction under section 80-I, because no profit was shown to be attributable to a priority industry.

Ratio Decidendi: For section 80-I relief, the profit must arise from a business activity having a direct and proximate nexus with a priority industry, and mere quarrying or captive use without such nexus does not satisfy the requirement of profits "attributable to" that industry.

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