1978 (12) TMI 40

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....te Tribunal was justified in holding that the assessee is entitled to relief under section 80-I of the Income-tax Act for the assessment year 1972-73 ? " The assessee is a limited company. The assessment year with which we are concerned is 1972-73. The assessee was doing business under the name and style of " The Cochin State Power and Light Corporation Ltd. " till the Kerala State Electricity Board exercised its option to purchase the undertaking under the Indian Electricity Act, 1910. That was with effect from December 2, 1970. The meter readings of the electricity consumed in any month was being taken by the staff of the company with effect from the succeeding month and the bills were prepared by it. Spot billing was done in respect o....

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....ny was not carrying on business during the accounting year and the deduction was, therefore, not tenable. On appeal by the assessee, the AAC sustained the reasoning and the conclusion of the ITO. On further appeal, to the Tribunal, the Tribunal held, differing from the two authorities below, that it was not necessary to show that the assessee functioned either during the whole or any part of the accounting year. Nevertheless, it sustained (sic) the conclusion of the authorities on the ground that it was enough to show that the amount in respect of which the deduction was claimed was " attributable " to a priority industry. Going by the dictionary meaning of this expression, the Tribunal was of the view that it was enough to show that there ....

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....tion under section 80H, the deduction under sub-section (1) of this section shall be allowed with reference to the amount of the profits and gains attributable to the priority industry or industries as reduced by the deduction under section 80H in relation to such profits and gains. " (5% is a substitution for 8% by the Finance Act 2 of 1971). On the language of s. 80-I of the Act, it is difficult to read into the section the requirement that the priority industry must have actually carried on business during the accounting year. But counsel for the revenue would contend that this requirement is implicit by reason of the definition of priority industry given in s. 80B, cl. (7).. That definition reads as follows : " 80-B. (7) ' prio....