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Commissioner Of Income-Tax vs Pandian Chemicals Ltd. on 29 April, 1997 cites

Cambay Electric Supply Industrial Co. ... vs The Commissioner Of Income Tax, ... on 11 April, 1978

In addition, as held by the Supreme Court in Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84, the profits or gains eligible for deduction under section 80HH of the Act must be derived from the actual conduct of the business, and unless the profits or gains are derived from the actual conduct of the business, it cannot be stated that the interest is derived from the industrial undertaking. In other words, the industrial undertaking must directly yield the profit, and it cannot be the means to yield the income. The deposit might be an incidental investment with the business of the industrial undertaking and that would not be sufficient to render the interest income as profits and gains derived from the industrial undertaking. The fact that the amount was assessable as business income itself would not be sufficient to hold that the interest income was derived from the actual conduct of the business of the industrial undertaking. In other words, it is not all business receipts that would qualify for the deduction and the Legislature has apparently not intended to give the benefit of deduction to all business income. If the intention of the Legislature was to grant relief to all business income, it could have used the expression, "profits and gains of industrial undertaking". The fact that the Legislature has used the expression "profits and gains derived from the industrial undertaking" has some significance and it connotes that the immediate and effective source of income eligible for grant of relief under section 80HH of the Act must be the industrial undertaking itself and not any other source. The mandate of law is that unless the source of the profit is the undertaking, the assessee is not eligible to claim deduction under section 80HH of the Act. Mere commercial connection between the income and the industrial undertaking would not be sufficient. We find no compelling reasons to give a wider meaning to the expression, "derived from" in section 80HH of the Act, as the nature of the provision, intended to give tax deduction, does not warrant a wider meaning being given to the expression, "derived from" in section 80HH of the Act. What appears to have been intended by the Legislature is that the industrial undertaking must be the source of the profits or gains. If the Legislature had intended to grant deduction to any profit from the industrial undertaking, it would have very well used the expression, attributable to" in section 80HH of the Act. We, therefore, do not find any justification to give the expression "derived from" a wider meaning to cover every receipt connected with the industrial undertaking. Therefore, we hold that the Appellate Tribunal has committed an error of law in holding that the interest earned on the deposit with the Tamil Nadu Electricity Board by the assessee should be treated as income derived from industrial undertaking for the purpose of the relief under section 80HH of the Act.
Supreme Court of India Cites 31 - Cited by 582 - V D Tulzapurkar - Full Document

Sterling Foods vs Commissioner Of Income-Tax, Karnataka on 1 June, 1984

Therefore, we prefer to follow the earlier decision of the Karnataka High Court in Sterling Foods v. CIT [1984] 150 ITR 292, wherein the Karnataka High Court construed the expression, "derived from" and held that though the income from the sale of import entitlements is liable to be included in the total income chargeable to income-tax, it would not confer any right on the assessee to claim deduction under section 80HH of the Act.
Karnataka High Court Cites 15 - Cited by 106 - Full Document

Phillips Carbon Block Ltd. vs Commissioner Of Income-Tax, Central on 11 August, 1981

14. Now, let us consider the decision relied upon by learned counsel for the assessee. The decision of the Calcutta High Court in Phillips Carbon Black Ltd. v. CIT [1982] 136 ITR 205, was not actually dealing with the scope of the expression, "derived" in section 84 of the Act and the question that was considered was whether the deposit with the bank can be regarded as investment. The Calcutta High Court held that the interest income on such deposit can be regarded as business income. There can be no quarrel over the proposition that the interest earned by the assessee on the deposit with the Electricity Board can be regarded as business income. But, the further question is whether that income was derived from the industrial undertaking, but that question was not the subject-matter of consideration before the Calcutta High Court and, therefore, the decision of the Calcutta High Court is not quite apposite to the facts of the case.
Calcutta High Court Cites 20 - Cited by 12 - S Mukharji - Full Document

Commissioner Of Income-Tax vs Seshasayee Paper And Boards Ltd. on 19 April, 1984

The decision of this court in CIT v. Seshasayee Paper and Board Ltd. [1994] 207 ITR 80, was dealing with the interest on deposit with the Electricity Board. While considering the question whether such interest would be entitled to deduction under section 80-I of the Act, this court has held that the assessee would be entitled to claim deduction on the interest income earned as the expression found in section 80-I was "attributable to" and this court held that the relief under section 80-I for priority industry is not confined only to the profit income derived from the industry and it has a wider import.
Madras High Court Cites 13 - Cited by 21 - Full Document
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