2007 (12) TMI 218

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....I. T. A. No. 1263/Del/2004 for the assessment year 2000-01. Since the same question of law is urged by the Revenue in both the appeals, they are being disposed by this common Order. 2. The questions that have been urged by the Revenue for consideration in both these appeals are as under: "(1) Whether interest earned by the assessee on RBI bonds is the income derived by it from the business of industrial undertaking so as to be eligible for deduction under section 80HHB of the Income-tax Act, 1961 ? (2) Whether the Tribunal was correct in law in allowing deduction under section 80-IA of the Act to the assessee on receipts from transportation of sleepers ?" 3. The assessee carded out certain construction works in two different pro....

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.... 5. The Commissioner of Income-tax (Appeals) (the "CIT(A)") reversed the order of the Assessing Officer and allowed the deduction to the assessee under section 80HHB in respect of the interest on RBI bonds as well as the deduction under section 80-IA in respect of the transportation charges received by it. The Tribunal concurred with the view taken by the Commissioner of Income-tax (Appeals) on both issues and that is how the Revenue has filed the present appeals. 6. It is contended by Ms. Prem Lata Bansal, learned senior standing counsel appearing on behalf of the Revenue, that the interest on RBI bonds could have never been considered to be the income derived from the business activities of the assessee. She drew a distinction between ....

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....tances of the case, it is not possible to view the interest received on RBI bonds as payment de hors the activity of the assessee pursuant to the execution of the contract. We do not find any error in the orders of the Commissioner of Income-tax (Appeals) as well as the Tribunal warranting any interference. No substantial question of law arises on this issue. 8. As regards the payment received on account of transportation charges, the Tribunal has, in our view, rightly observed that the assessee is transporting sleepers only to the railways at different sites and to no other entity. We agree with the view expressed by the Commissioner of Income-tax (Appeals), concurred with by the Tribunal, that the business of the assessee included not ....