Commissioner Of Income Tax vs Bry Air (India) (P) Ltd.
1997 Latest Caselaw 829 Del

JUDGMENT

R.C. Lahoti, J.

1. This petition under s. 256(2) of the IT Act, 1961, at the instance of the Revenue seeks a mandamus to the Tribunal for drawing up a statement of case and referring the following question for the opinion of the High Court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in directing the AO to allow deduction under s. 80-I in respect of income from engineering and design charges and also other income ?"

2. It is not disputed that the assessee-respondent is an "industrial undertaking" engaged in the manufacturing activity of de-humidifiers. During the course of such activity, the assessee-respondent has made earnings on account of engineering designing fee. However, it is not disputed that the assessee is not rendering professional advice to others and thereby earning the said fee. The engineering designing activity is related only to the articles manufactured and produced by the assessee itself. In our opinion, the view taken by the Tribunal that the engineering designing activity would be a part of manufacturing activity and hence covered by the expression "profits and gains derived from an industrial undertaking" as under in s. 80I of IT Act, 1961, cannot be found fault with.

3. However, the assessee has also derived income from rent, interest, scrap, difference in exchange rate, etc. Such income from other sources has also allowed the benefit of s. 80-I by the Tribunal. In our opinion, the question of law does arise to the extent of receipts under these heads-whether they could be treated as "profits and gains derived from an industrial undertaking".

4. In its appellate order, the Tribunal has not recorded a clear finding as to the figures of profits and gains derived by the assessee from such other sources. In para 3 of the appellate order of the Tribunal, dt. 13th September, 1994, we find a reference having been made to pp. 33 to 35 of the paper-book No. 1 before the Tribunal wherein such details are found to have been mentioned. Accordingly, the question as suggested by the Revenue needs to be reframed.

5. The Tribunal is directed to draw up a statement of case and refer the following question for the opinion of the High Court :

"Whether the Tribunal was correct in directing the AO to allow deduction under s. 80-I in respect of 'income from other sources' ?"

While drawing up the statement of the case, the Tribunal shall clearly state the heads and the amounts covered under "income from other sources", which are referred to at pp. 33-35 of the paper-book-I before the Tribunal and included in the expression "also other income" as used in the question suggested by the Revenue.

6. The petition stands disposed of accordingly.

7. No order as to costs.