2007 (2) TMI 149

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....ch, 2005 for the assessment year 1998-99 passed by the Income Tax Appellate Tribunal. 3. The brief facts leading to the filing of these appeals are:- ITA No.977 of 2005 4. The Assessee a Private Limited Company is engaged in business of fabrication and supply of equipments and technical items. This business is being carried out in units situated at Kalamb, Himachal Pradesh which is a notified backward area. Other business units of the Assessee are situated in Delhi and Noida. The profit derived from the Kalamb unit was eligible for deduction under Section 80-IA of the Income Tax Act, 1961 (for short the Act) in the year under consideration, whereas such benefit was not available to the other units of Assessee situated in Delhi and ....

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....99. The Income Tax Appellate Tribunal, following its order dated 20^th January, 2005 in ITA No.758/Del/2001 for the assessment year 1997-98, dismissed the appeal of the Revenue. 9. It has been argued by the learned counsel for the Appellant that as per provision of Section 80-IA of the Act where gross total income of the Assessee includes any profits and gains derived from any eligible business of an industrial undertaking, the whole of the profit of such eligible business is to be allowed as deduction under Section 80-IA of the Act and the interest earned by the Assessee is not a business income but it is an income under the head "income from other sources" and it cannot be treated as business income. 10. Learned counsel for the Appe....

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....ub-section 7 of Section 80-IA of the Act which is relevant in this case, is reproduced below:- "(7)Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purpose of determining the quantum of deduction under sub-section (5) for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year upto and including the assessment year for which the determination is to be made." 13. Peru....