TaxTMI 
TaxTMI 
2006 (7) TMI 197
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....for the Tribunal to find-'There is evidence to show that it was received in the estate on January 31, 1991'; 'it was on trial run for some time when the defect was noticed'; 'after making the repair the machinery was brought back to the estate when the invoice was issued' and are not the findings wrong and unsupported by evidence? 2. (c) Whether, on the facts and in the circumstances of the case the assessee is entitled to depreciation on fluid bed tea drier for the assessment year 1991-92 in the light of the finding of the Assessing Officer that the assessee had not put to use the assets during the previous year ending on March 31, 1991? 3. Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim deduction under section 80HHC and under section 80-I before applying rule 8 of the Income-tax Rules for allocation in regard to income from tea? 4. Whether, on the facts and in the circumstances of the case and read with rule 8 of the Income-tax Rules which brings only 40 per cent. of the income under the Central income-tax, the assessee is entitled to claim deduction under sections 80HHC and 80-I on 60 per cent. of the agricultural income as ....
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....the assessee. The Revenue has taken up the stand that there is no evidence on the part of the assessee to show that the machinery was brought to the premises on January 31, 1991. Further, it was pointed out that no invoice or a separate delivery note from the seller was obtained. Without any corroborative evidence, the Revenue took up the stand that it is not possible to substantiate the assessee's entry in its books on January 31, 1991, towards goods received note raised by the assessee itself. Further it was also pointed out that without a sale invoice it is not possible to consider the assessee as the owner of the machinery. Therefore, it was pointed out that the date of purchase of the machinery can be taken only as May 15, 1991, and, therefore, the assessee was not entitled for depreciation during the assessment year 1991-92. The Assessing Officer also computed the deduction under sections 80HHC and 80-I on the income worked out from the tea business after apportioning the same, after applying rule 8. However, on appeal, following the decision of the Madras High Court in the case of Commissioner of Agricultural Income-tax v. Periakaramalai Tea and Produce Co. Ltd. [1972] 84....
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....as contemplated under section 32AB of the Act. The Tribunal had found as a fact on material on record that the investment by the assessee in units of the UTI was in the course of business, and the manufacture and sale of tyres and the business of purchase and sales of units of the UTI were common in nature and both the businesses were intertwined and interlaced and, therefore, the sale of units was an "eligible business" within the meaning of section 32AB(2) of the Income-tax Act. The question as to whether the purchase and sale of the UTI bonds was in the course of business or not has to be decided by the taxing authority as a question of fact. The question as to whether the purchase of the UTI bond, REC bonds were in the course of business or not was not considered by the assessing authority in the instant case and hence we feel that an opportunity be given to the parties to raise their respective claims on the question as to whether the loss on the sale of units of the UTI is only a capital loss, which should be allowed to be set off against the business income of the relevant assessment year. In our view the matter requires further probe at the hands of the assessing authority.....
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....ter VI-A. This court held that a legal fiction is to be limited to the purposes for which it was created and should not be extended beyond the language of the section by which it is created. This court pointed out that rule 8 deals with two types of income, i.e., agricultural income and nonagricultural income at the ratio of 60:40 of the total income. After computing the total income, the same has to be bifurcated in the above manner. Therefore, the total income would necessarily mean the net income and not gross income. This court held that before the charging section is given effect to, taxable income must accrue and while computing the total income, all expenditure and other deductions and allowances must be taken into account. This court held that special deduction under section 80HHC must be granted before applying rule 8 which deems 40 per cent. of income from manufacture of sale of tea to be income liable to tax. In the light of the above decision we answer the question in favour of the assessee. I. T. A. No. 134 of 1999 : We are in this case concerned with the assessment year 1990-91. Questions raised in this appeal are identical to the questions numbers 3 and 4 raise....