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1 - 10 of 25 (0.48 seconds)Section 80HH in The Income Tax Act, 1961 [Entire Act]
Commissioner Of Income Tax, Karnataka vs Sterling Foods, Mangalore on 15 April, 1999
In that case the income of the assessed will be enhanced by Rs. 6.56 lakhs and in that case, deduction under section 80-I will be much more against the deduction claimed on the interest earned at Rs. 2,46,045. In fact this is a case of netting of the two interests which was for the purpose of business only. The interest payment was for the purpose of business as the borrowed funds were used only for business purpose. There is no dispute in this regard, and the interest income earned on FDRs was for business purposes because the FDRs were obtained for the purpose of security as required by the bank. Therefore, these FDRs were obtained for smooth running of the business. Therefore, this income is also from business activity of the industrial undertaking of the assessed. This is not a case where only interest income was earned and no payment was made on account of interest, here both interests were involved, as payments were there and receipts were there. Therefore, this is a case of netting of two interests, which the assessed has rightly netted and net amount was shown in its profit & loss account.
Commissioner Of Income-Tax vs Pandian Chemicals Ltd. on 29 April, 1997
No facts were given in the case of Fenner (India) Ltd., as simply the decision in case of CIT v. Pandian Chemicals Ltd. was followed. I have seen the facts in the case of Pandian Chemicals Ltd. The facts were that assessed-preferred security to the Electricity Board as the same was conditional for supplying electricity. The assessed claimed interest earned on these securities for the purpose of deduction under section 80HH. By following some other decision the Madras High Court has held that the interest income was not from direct source of the business undertaking. Therefore, it is not eligible for deduction under section 80HH. The facts of this case are also distinguishable, as there was no discussion in the order that whether the assessed had made any payment on account of interest on borrowed funds; whereas in the case before us the assessed has also paid interest on borrowed funds and interest earned on FDRs, which was conditional, were netted off.
Fenner (India) Ltd. vs Deputy Commissioner Of Income-Tax on 27 November, 1998
The decision of Madras High Court in the case of Fenner India Ltd. v. CIT (supra) was also discussed which was based on the earlier decision of the same High Court in the case of CIT v. Pandian Chemicals Ltd. (1995) 147 CTR (Mad) 5 and the same was also distinguished.
Commissioner Of Income-Tax vs Dunlop India Ltd. on 8 January, 1990
In the case of CIT v. Dunlop India Ltd. (1992) 197 ITR 34 (Cal) the Honble Calcutta High Court while examining the case of the assessed under section 80-I as it was existing in assessment year 1972-73, had an occasion to decide as to whether deposits in the form of government securities to obtain manufacturing facilities and industrial power connection was eligible for special deduction or not. Their Lordships decided the issue in favor of assessed after noting that if securities had to be furnished for the purpose of carrying on the business of the priority industries then interest receipts earned from the securities will have to be treated as part of the profits and gains attributable to priority industries.
Commissioner Of Income-Tax vs Paramount Premises (P.) Ltd. on 27 September, 1990
Had latest decision of Apex Court being considered, decision would be different in the case of South India Shipping Corporation Ltd. v. CIT (supra) but it is also settled proposition of law that if there are two views on a particular point rendered by two different High Courts then the view which is favorable to the assessed should be preferred and in this case direct decision of Hon'ble Bombay High Court in the case of CIT v. Paramount Premises (P) Ltd. is there and T have no option but to follow that favorable view and conclude that income so earned by the assessed as interest on FDRs was business income.
Commissioner Of Income-Tax vs South India Shipping Corporation Ltd. on 8 June, 1998
Further reliance was placed on the decision of CIT v. Dunlop India Ltd. (1995) 197 ITR 34 (Cal), CIT v. South India Shipping Corporation Ltd. (1995) 216 ITR 651 (Mad), and decision of Tribunal Delhi Bench "D" in Honda Sell Power Products Ltd. v. CIT ITA No. 2404/Del/1999 for assessment year 1995-96 decided on 24-3-2000 (reported at (2000) 69 TTJ (Del) 96), and concluded that assessed has rightly claimed deduction under section 80-I on the amount of interest earned on FDRs. This separate decision authorised by learned J.M. resulted into difference of opinion.
Rajasthan Petro Synthetics Ltd. vs Deputy Commissioner Of Income-Tax on 17 January, 1997
He also took into consideration the decision relied upon by the learned counsel for the assessed which were not discussed by the learned A.M. in detail and noted that Tribunal Delhi Bench decision in the case of Rajasthan Petro Synthesis Ltd. v. Dy. CIT (1997) 60 ITD 682 (Del) is again direct on the point involved.
M/S. Ashok Leyland Limited,Madras vs Commissioner Of Income Tax,Madras on 19 December, 1996
My learned brother has also placed reliance in the case of Ashok Leyland (supra), where the words "attributable to" and "derived from" were discussed and ultimately the deduction under section 80-I was allowed by the Apex Court. The brief facts in the case of Ashok Leyland were, that the appellant claimed relief under section 80-I on the income earned by it from import and sale of spare parts. The Income Tax Officer took the view that the import and sale of spare parts was not attributable to the industry carried on by the appellant and, therefore, the income arising there from, did not qualify for the benefit of section 80-I.
The Tribunal found that the appellant commenced manufacturing Ashok Leyland trucks in collaboration with a foreign company, Leyland from 1966 onwards; that there was a phased programme for the manufacture of necessary spare parts; that some of the purchasers of the trucks found it difficult during some years to get the requisite spare parts, either because the spare parts manufactured by the appellant were not sufficient to meet the demand or because the appellant did not manufacture these particular spare parts; that in the said circumstances and as a matter of commercial expediency, the appellant imported such spare parts and sold them during the accounting years relevant to the assessment years in question. The Tribunal, therefore, held in favor of the appellant. On a reference the High Court held against the appellant for the assessment years in question. On appeal to the Honble Supreme Court, the Supreme Court reversed the decision of the High Court that the industry being carried on by the appellant was admittedly a priority industry as defined in section 80B(7) of the Act. Reading the relevant portion of sub-section (1) of section 80-I along with the definition of "priority industry" in section 80B(7), the profits and gains arising from import and sale of spare parts were attributable to the industry carried on by the appellant. However, my learned brother has placed reliance on this decision in regard to attributable to, whereas in this decision the Honble Supreme Court has held that the income earned by the company from import and sale of spare parts was eligible for deduction under section 80-I. This is a direct decision on the point. The facts in the case here before us is on a stronger footing. The interest was earned on FDRs, which were taken as per condition of the bank and assessed has also paid interest on borrowed funds. Both the interests were netted off. Therefore, in my considered view, the interest earned by the assessed on FDRs was eligible for deduction under section 80-I, as there was a direct nexus.