1996 (12) TMI 4

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....htly held that the assessee would be entitled to relief under sections 80E and 80-I of the Income-tax Act, 1961, for the assessment years 1966-67 and 1967-68, respectively, on the income earned by it, from import and sale of spare parts from abroad ? " The assessee is engaged in the business of manufacturing Ashok Leyland trucks and also spare parts of those vehicles. It was also importing the spare parts from abroad and selling the same to the persons who have purchased the trucks from it. As and when the manufacture of spare parts by the assessee increased, there was a corresponding reduction in the quantum of imports of spare parts. Some profit was earned by the assessee on the sale of spare parts also besides the profit accruing from....

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..... Learned counsel for the assessee commended the reasoning of the said decision for our acceptance. Sections 80E and 80-1 were couched in identical terms. They provided for certain deduction from the profits and gains of a company attributable to priority industry. In so far as relevant, section 80-I(1) reads : " (1) In the case of a company to which this section applies, where the gross total income includes any profits and gains attributable to any priority industry, there shall be allowed, in accordance with and subject to the provisions of this section, a deduction from such profits and gains of an amount equal to eight per cent. thereof, in computing the total income of the company... " The expression "priority industry" occur....

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.... years relevant to the assessment years concerned herein. It is on these facts that the question referred has to be answered. We are of the opinion that reading the relevant portion of sub-section (1) of section 80-I along with the definition of "priority industry" in section 80B(7), it must be held that the profits and gains arising from import and sale of spare parts was attributable to the industry (priority industry) carried on by the assessee. On the facts found by the Tribunal it is difficult to disassociate the said activity from the main activity carried on by the assessee, viz., manufacture and sale of the Ashok Leyland trucks. It was intimately connected with the priority industry set up and being run by the assessee. The decision....