TaxTMI 
TaxTMI 
2024 (3) TMI 1079
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....ection 32AB of the Income Tax Act, 1961 (the Act) of Rs. 2,85,024/- only, as against appellant's claim for deduction of Rs. 76,97,918/-. The Assessing Officer restricted the deduction under Section 32AB of the Act as in his view occupancy charges earned by appellant from letting of space in the building known as Express Towers, Nariman Point, Mumbai is taxed under the head "income from house property" and hence, does not form part of "profits of eligible business or profession" for the purposes of computation of deduction under Section 32AB of the Act. Such income excluded by the Assessing Officer in the computation of deduction under Section 32AB of the Act is Rs. 1,27,11,742/- and the eligible deduction is 20% thereof. 3. Aggrieved by the aforesaid order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] who upheld the Assessing Officer's view by an order dated 22nd March 1991. This order of CIT(A) was impugned before the ITAT. The ITAT, by the impugned order dated 29th May 2002, held that since the rental income has been assessed in appellant's case as "income from house property" and has not been considered as business income, it will not ....
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....ct. 5 Mr. Chhotaray opposed and basically reiterated the findings of the ITAT. Mr. Chhotaray submitted that reading of Section 32AB of the Act makes it clear that it cannot include income computed under the heads computation of total income from house property, capital gains and other sources. This is because Section 32AB of the Act appears under Chapter IV of the Act entitled "computation of total income" and more specifically under Part D of the same Chapter entitled "profits and gains of business or profession". The sub-headings given to the various parts of Chapter IV indicate the different heads of income like salaries, income from house property, profits and gains of business or profession, capital gains etc. These sub-headings clearly indicate that the respective Sections occurring in the parts of Chapter IV apply to the respective heads of income under which the income is to be computed. Therefore, it is clear that the computation of business income has to be done strictly in accordance with the provisions of Section 28 to Section 44D of the Act. Since the income from house property, capital gains and other sources are governed by Sections occurring in other parts, the d....
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.... other than- (a) the business of construction, manufacture or production of any article or thing specified in the list in the Eleventh Schedule carried on by an industrial undertaking, which is not a small-scale industrial undertaking as defined in section 80HHA; (b) the business of leasing or hiring of machinery or plant to an industrial undertaking, other than a small-scale industrial undertaking as defined in section 80HHA, engaged in the business of construction, manufacture or production of any article or thing specified in the list in the Eleventh Schedule;] [(ii)" new ship" or" new aircraft" includes a ship or aircraft which before the date of acquisition by the assessee was used by any other person, if it was not at any time previous to the date of such acquisition owned by any person resident in India; (iii)" new machinery or plant" includes machinery or plant which before its installation by the assessee was used outside India by any other person, if the following conditions are fulfilled, namely:- (a) such machinery or plant was not, at any time previous to the date of such installation by the assessee, used in India; ....
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....duction under Section 32AB of the Act is not in dispute. The narrow point to be decided is whether appellant is entitled to deduction on the entire income which would include income from house property or it should be restricted only to the income chargeable to tax under the head "profits and gains of business or profession". 8. From the language of Section 32AB of the Act it is clear that to become eligible for deduction under Section 32AB of the Act, the assessee should first have income chargeable to tax under the head "profits and gains of business or profession". If such income does not form part of the total income, the assessee will not be eligible. It is also clear that out of such income, i.e., income out of profits and gains of business or profession, the assessee must have (a) deposited any amount in an account maintained by him with the Development Bank before the expiry of six months from the end of the previous year or before furnishing the return of his income, whichever is earlier; or (b) utilised any amount during the previous year for the purchase of any new ship, new aircraft, new machinery or plant, without depositing any amount in the deposit account under c....