TaxTMI 
TaxTMI 
1976 (10) TMI 46
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....essee falls in the Sixth Schedule, and further that the assessee does not manufacture anything else. Reading the provisions of s. 80-I and 80B(7) it would mean that if the gross total income includes "any profits and gains attributable to any business of manufacturing articles or things specified in the list in the Sixth Schedule" then the assessee would get a reduction equal to 80 per cent of such profits and gains. The following items credited to the Profit & Loss Account, according to the ITO and according to the Revenue, cannot be termed as "profits and gains from the activity of manufacturing:— Nature of the item Assessment year Assessment year . 1970-71 1971-72 1. Interest income. Rs. ———— * Rs. ———— * 2. Misc, Receipts Rs. ———— Rs. ———— 3. Insurance & Other claims Rs. ———— Rs. ———— 4. Rent from staff Rs. ———— Rs. ———— 5. Export Incentives Rs. ———— Rs. ———— 6. Surplus on sale Rs. ———— Rs. ———— 7. Sales-tax refund Rs. ———— Rs. ———— . Rs. ———— Rs. ———— The names and figures have been omitted under instruction from Shri....
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....ax Department being excess amount of Sales-tax paid. 5. According to the Revenue all these items have a remote connection with the manufacturing activity and cannot, therefore, be said to be profits and gains attributable to the manufacturing activity. In other words, the claim is that the profits and gains which arose directly from the sale of manufactured articles are alone eligible for deduction under s. 80-I but not other items. The AAC has, however, not agreed with this view and has held that all these items have a direct bearing with the business manufacturing nuts and bolts and cannot, therefore, be excluded for the purpose of s. 80-J. 6. We do not think that the Revenue's case is justified. The Revenue is trying to make a distinction between "income" and "profits and gains". In our opinion, such distinction is not well founded. As per s.28, income from business is not restricted merely to :"profits and gains" of business but includes also other items like compensation, income of a trade, profession or similar association, value of benefit or perquisite arising from business etc., but all the same profits and gains of business are income from business. It is well establi....
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....ore, boils down to this : whether the impugned items can be said to be profits and gains attributable to the business of manufacturing articles or things? It is to be noted that the section does not say that the profits and gains should be directly derived from manufacturing, and the very use of the expression "attributable" indicates that the profits and gains in the context should be understood in wider sense. Any receipts which are derived from the business of manufacturing and which go to increase the profits and gains, would, therefore, come under the purview of s. 80I(1). Considering the question from this angle, we do not think that any of the impugned items can be segregated, from the business of manufacturing. If such business were not there, these items would not have surely come into existence. The two items of interest either from B.S.E.S. Ltd. or Hindustan Steel Limited have been received because the assessee conducts this manufacturing activity and they have a close nexus to the business. Similarly the other items, like sale of empty drums etc., export cash assistance sale of material becoming useless like used oil, grinding wheels, platforms, export incentives rent f....
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.... 35B of the Act on Rs. ———. There is no dispute that the payment was made to the Director of Exhibitions, Ministry of Foreign Trade, New Delhi, for display of exhibits at trade fairs at the Barcelona International Samples Fair Djakarta Fair(Indonesia) at Suva(Fiji Islands) and in Sweden. The assessee had claim weighted deduction in respect of this item which claim was not accepted by the ITO. The AAC held that the item was eligible for weighted deduction as it fell within s. 35B(1)(b)(i) which refers to advertisement or publicity in respect of the assessee's goods was outside India. 11. The only contention of the learned Departmental Representative was that inasmuch as the payment was made in India, the assessee was not eligible for the relief. 12. This question has been considered by now by different Benches of the Tribunal at Bombay, and these Benches are uniformly of the opinion that only such item which falls under s. 35B(1)(b)of the(iii) will not be eligible for the deduction if the expenditure is incurred in India and not outside India-and further that this condition of payment to be made outside India does not apply to the other eight items listed under s. 35B(1)(b....