TaxTMI 
TaxTMI 
TaxTMI 
1999 (9) TMI 125
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....enditure crystallised during the asst. yr. 1989-90, "because all actions relating to accrual of liability had been undertaken or done during that previous year. 2. That the CIT(A) erred on facts and in law in confirming the expenditure on rent, repairs and depreciation amounting to Rs. 2,32,434 under s. 37(4). 3. That the CIT(A) erred on fact and in law in not holding that other income amounting to Rs. 8,32,191 was part of profits and gains derived from the industrial undertaking for purposes of deduction under s. 80-I. 3.2 That the CIT(A) erred on facts and in law in observing inter alia, that the source referable to the aforesaid receipts was not the business of the undertaking." 3. In regard to the first ground, we have heard the riv....
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.... this issue in favour of the assessee and against the Revenue. 7. In regard to ground No. 2 we tested the prescription of s. 34 on the touchstone of Hyden's Rule. We find that expenditure on maintenance of guest house was allowable till28th Feb., 1987, as a deduction in computing the profits and gains of the business. It was subject to the limits as prescribed in r. 6C as existed at that time. It was felt by the legislature that business houses were incurring lavish expenditure on maintenance of guest house and claiming the same as deduction. In order to put a check on such lavish expenditure, s. 37(4) was inserted. The rule of construction which is relevant to the present enquiry is expressed in the maxim: "Generalia Specialibus non Derog....
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.... (Coal ash, iron) 2,90,116,64 (ii) Insurance claim 5,59,730.00 ----------- 8,49,847.00 4. Liabilities no longer required written back 46,842.00 5. Profit/loss on sales of fixed assets (Typewriters) 4,156.00 ------------- TOTAL 11,22,307.00" ------------- 11. In regard to the interest from employees it was submitted that this sum was advanced in the normal running of business. In regard to interest from HSEB and interest received from customers on late payment it was submitted that the issue stands squarely covered in favour of the assessee by the decision of the Madras High Court rendered in the case of CIT vs. Rane Madras Ltd. (1998) 148 CTR (Mad) 404 : (1999) 102 Taxman 284 (Mad). In regard to the interest on fixed de....
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....of scrap, the CIT(A) allowed the claim. As such, the assessee is not in appeal on this count. In the case of Ashok Leyland Ltd. vs. CIT (1997) 138 CTR (SC) 287 : (1997) 224 ITR 122 (SC), the assessee was manufacturer of trucks in collaboration with foreign company. There was phased programme for manufacture of spare parts. Because the purchasers experience difficulty in procuring spare parts the assessee imported spare parts to meet the demand. The question before the apex Court was whether the profit from the sale of imported spare parts can be attributed to the priority industry. The Hon'ble Supreme Court has held that the activity of sale of imported parts was intimately connected with the priority industry set up and run by the assessee....
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....ct, 1961. 16. The expression "attributable to" is of wider import than the expression "derive from". The former expression covers receipts from sources other than the actual conduct of the business of the priority industry. Therefore, in the present case, we got to see that whether there exist a direct nexus between the profits and gains of the industrial undertaking. The raw materials were said to have been purchased incidental to the business of the industrial undertaking. The profit on sale of such raw material is insignificant comparing to the overall turnover of the assessee-company. The profit derived is incidental to the activity of the industrial undertaking. It has got a direct nexus with the profits of the industrial undertaking.....