TaxTMI 
TaxTMI 
2011 (5) TMI 166
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....95 (kol)/2002 for the Assessment Year 1997-98 dismissing the appeal preferred by the assessee. The facts giving rise to filing of this appeal may be summed up thus: a) The assessee is a public limited liability company within the meaning of the Companies Act, 1956. The appellant carries on the business of growing and manufacturing tea. b) The appellant has 17 tea gardens and its employees from time to time come from the gardens to the Headquarter of the appellant at Calcutta for the purpose of appellant's business. c) The appellant maintains a transit flat at Calcutta for the garden employees who come to the Headquarters for official work and such transit flat is exclusively used by the employees of t....
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....on under Section 80HHC was to be allowed before apportioning the composite income in the ration of 60:40 or after such apportionment and as to the method of quantification of the deduction under the said Section. g) For the Assessment Year 1997-98 the appellant claimed deduction under Section 33AB of the Act amounting to Rs.50,69,336/-. The appellant also claimed deduction under Section 80HHC before apportioning the composite income in the ration of 60:40. h) In the order of assessment dated March 31, 2000, the Assessing Officer allowed deduction under Section 33AB as claimed in the return, though with reference to the assessed income, according to the appellant, it was entitled to a higher deduction. The Assessing Officer comp....
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.... of the composite income determined under Rule 8 of the Rules. The Tribunal, however, remanded the matter to the Commissioner of Income-tax (Appeals) for the purpose of deciding the quantum of deduction under Section 33 AB with reference to 40% of the composite income as assessed. Being dissatisfied, the assessee has come up with the present appeal. A Division Bench of this Court at the time of admission of this appeal formulated the following substantial question of law: "a) Whether on a proper interpretation of the provisions of sub-section (4) and (5) of Section 37 of the Income-tax Act, 1961, the Tribunal was justified in law in holding that the transit flat for employees was a guest house and the expenditure in resp....
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....mative and against the assessee by relying upon the said decision. As regards the third question formulated by the Division Bench, Mr. Khaitan contended that the provision contained in Section 33AB of the Act should be applied first and after calculating the deduction available under the said provision, the total deduction should be excluded and, thereafter, Rule 8 of the Rule should be applied for the purpose of calculation of 40% of the total income. Mr. Khaitan contends that the Tribunal below committed substantial error of law in holding that the deduction under Section 33AB was to be calculated on 40% of the income determined under Rule 8. He, therefore, prays for setting aside the aforesaid finding of the Tribunal below. As ....
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....on Bench mentioned above, it will be profitable to refer to the provision contained in Section 33AB of the Act without the proviso to the same as those are unnecessary for our purpose and the said provisions are quoted below: "33AB. (1) Where an assessee carrying on business of growing and manufacturing tea in India has, before the expiry of six months from the end of the previous year or before furnishing the return of his income, whichever is earlier, deposited with the National Bank any amount or amounts in an account (hereafter in this section referred to as the special account) maintained by the assessee with the Bank in accordance with, and for the purposes specified in, a scheme (hereafter in this section referred to as the scheme....