TaxTMI 
TaxTMI 
2003 (5) TMI 195
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.... assessee has expressed its inability to produce the confirmation from ANZ Grindlays Bank. In the absence of any evidence the claim of legal and professional expenses were disallowed. 4. In first appeal ld.CIT(A) has again reiterated the same facts as mentioned by Assessing Officer and mentioned that the appellant has again failed to produce any documentary evidence in support of claim of expenses. The addition was confirmed. 5. On behalf of the assessee ld.A.R. Shri H.P. Manajani submitted that the assessee is an investment company holding shares of various companies. M/s. Gabriel India Ltd. offered partly convertible debenture, however, the company had insufficient funds to avail this attractive offer, therefore, sought help for arrangement of finances so that the debentures could be purchased. Through goods offices of Anand Pvt. Ltd. the Bridge Loan of Rs. 10 lakhs was arranged. Subsequently for buying back of the said debentures the good offices of Anand Pvt. Ltd. were utilized. Since the assessee had no direct dealing with ANZ Grindlays Bank, therefore, for arrangement of Bridge Loan and for buying back of non convertible portion of debentures the contacts of Anand Pvt. ....
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..... 10. In first appeal ld. CIT(A) was of the opinion that the generation of scrap was only incidental to the manufacturing activity which could not be considered as income "derived from industrial undertaking". According to the ld. CIT(A) generation of scrap was independent to manufacturing activity, therefore, not entitled for claim of deduction under section 80HH and the action of the Assessing Officer was confirmed. 11. Before us ld. A.R. has submitted the facts of the case as mentioned in above paras and in support of the claim cited a decision of Hon'ble Madras High Court in the case of Fenner (India) Ltd. v. CIT (No. 2) [2000] 241 ITR 803 (Mad.). 12. On behalf of the Revenue ld. D.R. has supported the orders of the authorities below and argued that the sale of scrap cannot be said to be income derived from manufacturing activity as held by ld. CIT(A), therefore, the claim deserves to be dismissed. 13. We have carefully considered the submissions of both the parties in the light of the orders of the authorities below as well as the case law cited. In view of the facts referred above we have carefully considered the precedent of Hon'ble Madras High Court in the case ....
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....t of applicability of Income Tax rate on the appellant company. The claim of the appellant is that the Income Tax rate at 45% plus surcharge should have been applied against which the Assessing Officer has applied income tax rate at 50% plus surcharge thereon. The ground also refers that the appellant company is neither a trading company nor an investment company, therefore, not liable to income tax at higher rate but falls under the category of lower rate of tax. 17. As per the order passed under section 143(3) r.w.s. 148 dated 21-11-1994 the Assessing Officer has observed that the rate of tax was wrongly charged by treating as a manufacturing company instead of charging the rate leviable on an investment and trading company. Originally the Assessing Officer has levied the tax @45% plus surcharge however, on scrutiny of the income from various sources it was found that the income from manufacturing activity did hot constitute more than 50%. The Assessing Officer has recorded that the gross total income of Rs. 8,58,759 comprised of the following : (1) Investment income (Dividend) &nbs....
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.... may not result into treating it as non industrial company. 18. In first appeal ld. CIT(A) has mentioned that admittedly for the year under consideration the income of the assessee from manufacturing activity was not more than 50%, therefore, the company could not be said to be a manufacturing company. In a case where the assessee is a trading company or an investment company the rate of tax applicable should be 50% which was rightly applied as the company did not fall in the category of manufacturing company. Levy of tax @50% was upheld. 19. On behalf of the assessee ld. A.R., Shri H.P. Manajani has vehemently opposed the charge of tax at 50% on the assessed. The first limb of argument of ld. A.R. was that the assessee has always been treated as manufacturing concern. In support he has drawn our attention on the original order for the same assessment year i.e., assessment year 1991-92 dated 8-3-1993 wherein as per the body of assessment] order the Assessing Officer has mentioned that the assessee's business was of manufacturing of Center Tubes used in automobile industries. ld. A.R. has also mentioned that while passing the order under section 143(3) r.w.s. 148, the order in....
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....93% therefore, the Assessing Officer has rightly charged 50% of tax. 21. We have carefully considered the submissions of both the sides in the light of the orders of the authorities below as well as the provisions of Finance Act. Finance (No. 2) Act provides : "Paragraph E In the case of a company :- Rate of income-tax I. In the case of a domestic company :- (1) where the company is a company in 40% of the total income which the public are substantially interested (2) where the company is not a company in which the public are substantially interested (i) in the case of trading company or 50% of the total income an investment company (ii) Any other case 45% of the total income". In view of above, in the case of a company in which public are not substantially interested, then in case of a trading or investment company 50% rate of tax is to be applied and in any o....
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....er column (i) but the legislature has separated the two type of companies i.e., trading company and investment company by the word "or instead of using the word "and". The conjunction "or" is always used to link alternatives. The dictionary meaning of the word "or" is otherwise and either. On the contrary, the conjunction "and" is used to connect words of the same part of speech or sentence. The word "and" connects two identical comparatives so as to emphasise progressive change. It is also used to connect two numbers to indicate that they are being added together. For the correct interpretation of this conjunction we have consulted Oxford Dictionary. On the analysis of the meaning assigned to these two conjunctions based on the common usage there is no two opinion that the word "and" is used for the purpose of connecting two numbers so that the numbers can be added together. The legislature must have taken into account the difference of the two conjunctions on the basis of their common usage as commonly acceptable, therefore, used a selective terminology. Thus for the purpose of determining the total income of a company the income arising from trading activity or income arising fr....