Madras High CourtThe Commissioner Of Income Tax vs The Ambur Co-Operative Sugar on 9 November, 2004Bench:P.D.Dinakaran,T.V.MasilamaniIN THE HIGH COURT OF JUDICATURE AT MADRAS           

DATED: 9/11/2004  

CORAM   

THE HONOURABLE MR.JUSTICE P.D.DINAKARAN            
AND  
THE HONOURABLE MR.JUSTICE T.V.MASILAMANI           

T.C.(A) No.879 of 2004

The Commissioner of Income Tax  
Tamil Nadi-VIII, Madras.                                        .. Appellant

-Vs-

The Ambur Co-operative Sugar 
Mills Ltd., Vadapudupet Post
Pin-635 812.                                                    .. Respondent

        PRAYER:  Appeal filed underSection 260Aof the Income Tax Act against
the order dated 23.5.2004 made in I.T.A.No.1065/Mds/96  on  the  file  of  the
Income Tax Appellate Tribunal Madras 'C' Bench.

!For Appellant          :       Mrs.Pushya Sitaraman

^For Respondent         :       -

:JUDGMENT(Judgment of this court was delivered by P.D.DINAKARAN,J.) 

        The revenue is the appellant in this appeal filed against the order of
the Income Tax Appellate Tribunal 'C' Bench, Chennai dated 23.5.20 04 made  in
I.T.A.No.1065/Mds/96, with reference to the assessment year 1990-91.2.1.  The facts of the case, so far as they are relevant are as under:The assessee  is  a  Sugar Mill.  For the assessment year 1990-91, the
assessee had claimed relief underSection 32ABof  the  Income  Tax  Act  (for
brevity "the  Act")  to  the tune of Rs.9,17,145/-.  The Assessing Officer, by
order dated 6.11.1995, finding the assessee  had  earned  interest  from  Bank
Interest  which  was  shown by the assessee as Income from other sources, held
that deduction underSection 32ABof the Act is allowable only in  respect  of
the  income from the "Profits and Gains of Business" and not from "Income from
other sources".2.2.  The assessee preferred an  appeal  before  the  Commissioner  of
Income Tax, who by order dated 12.3.1996, confirmed the order of the Assessing
Officer and dismissed the appeal of the assessee.2.3.   The  assessee  preferred  a further appeal before the Tribunal.The Tribunal, by order dated 23.5.2004, following the  decision  of  the  Apex
Court inAPOLLO  TYRES  LTD.    v.  COMMISSIONER OF INCOME TAX, [2002] 255 ITR        
273, allowed the appeal of the assessee.  Hence, the revenue has preferred the
present appeal on the following substantial questions of law:(i) Whether on the facts and in the circumstances of the case, the Income  Tax
Appellate  Tribunal  was right in law in holding that the assessee is entitled
to deduction undersection 32ABof the Act to the extent of Rs.9,17,145,  even
though  interest  earned on deposits out of surplus fund is "Income from other
sources" is valid in law?  and(ii) Whether on the facts and in the circumstances of the case, the Income Tax
Appellate Tribunal was right in law in justifying in granting deduction,  when
the  preamble  toSection  32ABof  the Act clearly indicates that relief is
admissible for such profits derived under the head  "Profits  and  Gains  from
business or profession" is valid in law?3.  The Apex  Court  inAPOLLO TYRES LTD.  v.  COMMISSIONER OF INCOME      
TAX, [2002] 255 ITR 273, held as under:"..  the business of the assessee company of buying and selling of  units  was
an  "eligible  business"  as  contemplated  undersection 32AB, and the income
earned from its investment in the units of the Unit Trust of India had  to  be
included  in  computing the profits of "eligible business" underSection 32AB.
The fact that the income was shown under a different head of  income  did  not
deprive  the assessee company of the benefit undersection 32ABso long as the
investment in the units was in the course of its "eligible business"."(emphasis supplied)4.InCARBORANDUM UNIVERSAL LTD.  v.   COMMISSIONER  OF  INCOME  TAX,          
[200 4] 265 ITR 372, this Court, held that:"..   the  Assessing  Officer  had excluded the amount of dividend received as
also the income by way of interest and rents by  relying  on  the  facts  that
those incomes were to be taxed under the Act as income from other sources.  By 
doing  so,  he had failed to give effect to the plain language and the mandate
ofSection 32AB(3)of the Act."5.   When  an  identical  question,  viz.,  whether  in  the facts and
circumstances of the case, the Tribunal was right in holding that  "  business
profits"  for  the  purpose  ofSec.32ABof the Act could include other income
such as interest, rent and dividend,  was  raised  for  our  consideration  in
T.C.(A)  No.801  of 2004, by judgment dated 30.9.2004 (to which I am a party),
this Court, following the decision reported inCARBORANDUM UNIVERSAL LTD.   v.   
COMMISSIONER OF INCOME TAX, [2004] 265 ITR 372, held against the revenue.6.  From the law as enunciated from the decisions,referred  to  above(i) APOLLO TYRES  LTD.    v.  COMMISSIONER OF INCOME TAX, [2002] 255 ITR 2 73;(ii) CARBORANDUM UNIVERSAL LTD.  v.  COMMISSIONER OF INCOME TAX, [2  004]  265            
ITR 372; and (iii) Judgment dated 30.9.2004 made in T.C.(A) No.801 of 2004, we
are  of  the  firm  opinion that no substantial question of law arises for our
consideration.  This appeal is, therefore, dismissed.  No costs.Index   : Yes

Internet:Yes

sasi

