Industrial alcohol outside Eleventh Schedule coverage, so Section 80-I deduction is not denied on that basis.

Industrial alcohol is not covered by Item 1 of the Eleventh Schedule, because the words "beer, wine and other alcoholic spirits" were read in context to denote consumable alcoholic beverages. Applying ejusdem generis and noscitur a sociis, the general words were confined to the same genus as the specific items, and denatured spirit used for industrial purposes fell outside that class. Deduction under Section 80-I is therefore not denied on the basis that industrial alcohol falls within the Eleventh Schedule.

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Issues: Whether industrial alcohol falls within Item 1 of the Eleventh Schedule to the Income-tax Act, 1961, so as to deny deduction under Section 80-I.

Analysis: Item 1 of the Eleventh Schedule refers to "beer, wine and other alcoholic spirits". The expression was read in its statutory context, and the general words were construed as taking colour from the specific words preceding them. Industrial alcohol is denatured spirit, used as raw material or for industrial purposes, and is not liquor fit for human consumption. The principle of ejusdem generis, supported by noscitur a sociis, applied because the enumerated words formed a recognizable genus of consumable alcoholic beverages. The provision was therefore held not to extend to industrial alcohol.

Conclusion: Industrial alcohol is not covered by Item 1 of the Eleventh Schedule, and deduction under Section 80-I is not denied on that basis.

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