Central-I, Mumbai v. Mr. Jagdishprasad M. Joshi

IN THE HIGH COURT OF JUDICATURE AT BOMBAY VPH ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL No. 67 OF 2006 WITH INCOME TAX APPEAL No. 46 OF 2006 The Commissioner of Income-Tax Central-I, Mumbai Appellant Vs Mr. Jagdishprasad M. Joshi ... Respondents Mumbai Mr. Suresh Kumar, for the appellant. Mr. R. Murlidhar a/w Mr. A. K. Jasani, for the respondent. CORAM: Dr. S. RADHAKRISHNAN, & V. C. DAGA, JJ. DATED: NOVEMBER 25, 2008. P.C.: ---- . Heard the learned counsel for the appellant and the learned counsel for the respondent. In the above appeals, following substantial question of law arises- Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in allowing the appeal of the assessee holding that the interest income earned by the assessee on fixed deposits with the bank and - 2 - other interest income are eligible for deduction under section 80-IA of the Act? 2. Perused judgment of the learned Income Tax Tribunal wherein it is observed as under- "The very same issue was considered by ITAT, Mumbai ’G’ Bench in assessee’s own case for the immediately preceding Assessment Year 1997-98 in ITA 3569/M/2001 through their order dated 13/9/2004. After considering the facts and features of the case and also considering the decision of the Supreme Court in the case of Pandian Chemicals Ltd. Vs. CIT, 262 ITR Pandian Chemicals Ltd. Vs. CIT, 262 ITR 278, 278, the Tribunal has held that the interest income earned by the assessee was in the nature of business income and should be considered as part of business profit for the purpose of granting deduction u/s. 80IA. We find that this issue stands fully convered by the said order in favour of the assessee. Accordingly we direct Assessing Authority to include the interest income also as part of assessee’s business income for granting relief u/s.80IA." - 3 - 3. Mr. Suresh Kumar, learned counsel for the appellant strongly relied upon the judgment of the Pandian Chemicals Ltd Vs.Commissioner of Income Tax, reported in [(2003) 262ITR BW and also judgment of Madras High Court in theCommissioner of Income-tax Vs. PandianChemicals Ltd. reported in [1998] ITR 0497X. Supreme Court in the case of Pandian Chemicals Ltd Vs. Commissioner of Income Tax, ITR BW case of Commissioner of Income-tax Vs. Pandian Chemicals Ltd. 4. However, Mr. Murlidhar, learned counsel appearing on behalf of the respondent strongly relied on the judgment of Delhi High Court in the case of Commissioner of Income-Tax Vs. Eltek SGS P. Ltd. Commissioner of Income-Tax Vs. Eltek SGS P. Ltd.[2008] 300 ITR 6 (Delhi) wherein the Delhi reported in [2008] 300 ITR 6 (Delhi) High Court has in fact considered the very same issue, and also the judgment relied upon by the Revenue has clearly distinguished the language employed under section 80-IB and 80-HH and has observed as under- "That apart, section 80-IB of the Act does not use the expression "profits and gains derived from an industrial undertaking" as used in section 80HH of the Act but uses the expression "profits and gains derived from any businesses referred to in sub-section." "A perusal of the above would show that there - 4 - is a material difference between the language used in section 80HH of the Act and section 80-IB of the Act. While section 80HH requires that the profits and gains should be derived from the industrial undertaking, section 80IB of the Act requires that the profits and gains should be derived from any business of the industrial undertaking. In other words, there need not necessarily be a direct nexus between the activity of an industrial undertaking and the profits and gains." "Learned counsel for the Revenue also drew our attention to Pandian [2003] section 80HH of the Act but uses the expression "profits and gains derived from any businesses referred to in sub-section." "A perusal of the above would show that there - 4 - is a material difference between the language used in section 80HH of the Act and section 80-IB of the Act. While section 80HH requires that the profits and gains should be derived from the industrial undertaking, section 80IB of the Act requires that the profits and gains should be derived from any business of the industrial undertaking. In other words, there need not necessarily be a direct nexus between the activity of an industrial undertaking and the profits and gains." "Learned counsel for the Revenue also drew our attention to Pandian [2003] reading of the judgment we find that that also deals with section 80HH of the Act and does not lay down any principle different from Sterling fact, in Pandian (SC) Electric 113 suggest, as we have held above, that the expression "derived from an industrial undertaking" is a step removed from the - 5 - business of the industrial undertaking." 5. Having regard to the aforesaid judgments we are not inclined to entertain the above appeals, as there is no substantial question of law involved in both the appeals. In the result, both the appeals stand dismissed. Sd/- Dr. S. RADHAKRISHNAN, J.] [ [ [ Sd/- [ V. C. DAGA, J.]