2016 (11) TMI 372

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....export and had inter alia during the relevant assessment year AY 1990-1991 reported a certain amount as commission income for export sales, so the assessee claimed the benefit of Section 80 HHC. The AO rejected the assessee's contention; the appellate commissioner confirmed the views of the AO. However, the ITAT allowed the appeal by the impugned order. While doing so it followed its previous special bench ruling in International Research Park Laboratories Limited vs. CIT (1994) 50 ITD 37, where it was held that deduction under Section 80HHC can be granted on the basis of ratio export turnover in relation of turnover of the entire business. 2. Revenue contends in the light of subsequent decisions of Supreme Court in Pandian Chemicals Lim....

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....t for the purpose of getting this essential input, the statutory requirement was that the deposit must be made as a pre-condition for the supply of electricity. Consequently, according to the appellant, the interest on the deposit should be treated as income derived from the industrial undertaking within the meaning of Section 80HH. 5. The High Court rejected the submission of the appellant by relying upon the decision of this court in Cambay Electric Supply Industrial Co. Ltd. v. CIT (1978) 113 ITR 84 , where this court had clearly stated that the expression "derived from" had a narrower connotation than the expression "attributable to" (page 93) : "In this connection, it may be pointed out that whenever the Legislature w....

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....of the industrial undertaking, the deposit required for its supply is a step removed from the business of the industrial undertaking. The derivation of profits on the deposit made with Electricity Board cannot be said to flow directly from the industrial undertaking itself." 5. As it is evident that Pandian Chemicals Limited's case (supra), has relied upon the previous ruling in Cambay Electric Supply Industrial Co. Ltd. vs. CIT (1978) 113 ITR 84 and the constitution bench judgment of Mrs.Bacha F. Guzdar vs. CIT (1955) 27 ITR 1 (SC). Furthermore, Pandian Chemicals Limited's case (supra) has been confirmed in Liberty India's case (supra) and subsequently in CIT vs. Punjab Stainless Steel Industries (2014) 364 ITR 144/46 taxmann.com 68 (SC....