2004 (9) TMI 307

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....under s. 80-IA for the reason that it is situated in the notified area. 3. In computing its taxable income, the assessee has claimed full deduction of its profit from taxation. The profit of the assessee has been worked out after taking into consideration a sum of Rs. 32,64,044 as part of assessee's business income. This amount, in fact, represented the interest received by the assessee during the previous year from various fixed deposits made with banks. The AO held that this interest income, therefore, would not come under the head "business income". He, therefore, excluded the above sum of Rs. 32,64,044 from the computation of business profit and brought the same under the head "income from other sources". The result is that the asses....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the two expressions. As far as the assessee is concerned, it is seen that the income is derived from "business of an industrial undertaking". The assessee has made bank deposits out of its own business funds. Therefore, the interest income needs to be construed as "income from a business of assessee's industrial undertaking". In other words, the learned chartered accountant pointed out that the scope and extent of the provisions contained in s. 80-IA are much wider than those contained in ss. 80HH and 80-IA amended subsequently. 6. The learned chartered accountant further submitted that the Hon'ble Supreme Court has held in the case of CIT vs. Govinda Choudhary & Sons (1994) 116 CTR (SC) 61 : (1993) 203 ITR 881 (SC) that an income can be....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....urt-Nagpur Bench in CIT vs. Nagpur Engineering Co. Ltd. (2000) 245 ITR 806 (Bom). 10. Shri Bharat Bhusan, the learned Departmental Representative appearing for the Revenue, contended that the Hon'ble Supreme Court has decided the issue in Pandian Chemicals Ltd. vs. CIT (2003) 183 CTR (SC) 99 : (2003) 262 ITR 278 (SC), wherein it is held that the interest derived by the industrial undertaking of the assessee on deposits made with the Electricity Board for the supply of electricity for running the industrial undertaking could not be said to flow directly from the industrial undertaking itself and was not profits or gains derived by the undertaking. The learned Departmental Representative submitted that in ss. 80HH and 80-IA, the profits ne....