- (1.) Leave granted in Special Leave Petitions.
(2.) Two questions, as stated hereinbelow, arise for determination in this batch of civil appeals: (1) Whether appellant assessee was entitled to deduction under Sections 80HH and 80I of the Income Tax Act, 1961 in respect of ship-breaking activity undertaken by it (2) Whether usance interest partakes of the character of purchase price and, therefore, not liable to deduction at source under Section 195(1) of the Income Tax Act, 1961 We may refer to Civil Appeal Nos. 6692-6723 of 2003 for deciding these appeals. Answer to question No. 1:
(3.) The Income Tax Act, 1961 does not define the expression industrial undertaking. Section 80HH falls under Chapter VI-A. Section 80HH falls under sub-Chapter C which deals with deductions in ease of certain incomes. Section 80HH deals with deduction in respect of profits and gains from newly established industrial undertakings. Under Section 80HH(I), it is, inter alia, provided that where gross total income of an assessee includes any profits and gains derived from an industrial undertaking to which the Section applies, then, a deduction shall be allowed in computing the total income of the assessee for such profits and gains of an amount equal to 20 per cent thereof. However, under Section 80HH(2), the deduction applies only to an industrial undertaking which fulfils certain conditions, namely, that the industrial undertaking must be involved in the activity of manufacturing or producing articles. It is this expression in Clause (i) of Sub-section (2) of Section 80HH which arises for consideration before us in this case.;