High Court Of Madras
Pandian Chemicals Ltd. vs. CIT
Sections 80HH, 246
Asst. Year 1981-82
R. Jayasimha Babu & A.K. Rajan, JJ.
Tax Case No. 537 of 1987
10th October, 2001
Counsel Appeared
P.P.S. Janarthanaraja, for the Assessee : Mrs. Chitra Venkataraman, for the Revenue
JUDGMENT
R. JAYASIMHA BABU, J. :
Two questions have been referred to us for the asst. yrs. 1981-82. The first question referred is the assessee’s entitlement to deduction under s. 80HH of the IT Act, in respect of the sale of scraps, gunny bags, interest receipt, etc. The Tribunal has held that the assessee is not entitled to that deduction. So far as interest receipt is concerned, in a case concerning the assessee for an earlier year, it was held that no deduction can be claimed in respect of that item for the purpose of calculating deduction under s. 80HH of the Act. That case is the case of CIT vs. Pandian Chemicals Ltd. (1998) 147 CTR (Mad) 5 : (1998) 233 ITR 497 (Mad) : TC S25.2556. So far as the other items mentioned such as scraps and gunny bags, no details have been given. There is nothing to show that these items were necessary by-products in the process of manufacture and that the amount realised from the sale were capable of being regarded as income from the industrial undertaking. The Tribunal was, therefore, right in rejecting those claims as well. The first question is answered against the assessee.
2. The second question referred is regarding the maintainability of an appeal under s. 246 of the IT Act as far as the claim of interest under s. 214 of the IT Act was concerned. As admittedly there were other questions raised by the assessee along with the question regarding interest, such levy was clearly capable of being questioned in an appeal, as has been held in the case of Rajyam Pictures vs. Addl. CIT 1978 CTR (Mad) 319 : (1978) 114 ITR 847 (Mad) : TC 6R.761. That question is, therefore, answered in favour of the assessee.
[Citation : 254 ITR 562]
