VIJENDER JAIN, C.J. - (1.) THE assessee has preferred the present appeal against the order of the Income Tax Appellate Triibunal, Delhi Bench dated 30.11.2004 pertaining to the assessment year 1997 -98.
(2.) THE assessee, who is in the business of ginning and pressing of cotton, filed the return of income on 21.11.1997 at an amount of Rs. 8,63,500/ - for the assessment year 1997 -98. The Assessing Authority disallowed the deduction under Section 80HH and 80I of the Income -tax Act in respect of the amount of Rs. 2,76,009/ -, which was claimed by the assessee as an income on account of interest and carrying charges, and treated it to be an income on account of interest on trade debtors and creditors against the regular business transactions of sale and purchase having been carried on and conducted by the assessee. The Assessing Authority primarily disallowed the deductions on the ground that the interest and carrying charges is an income which has not been derived from the industrial undertaking and that such an activity cannot be treated to be an essential part of the industrial undertaking. The Tribunal upheld the order of the Assessing Authority which has resulted in the present appeal having been filed before this Court raising the following substantial questions of law: a. Whether under the facts and circumstances of the case the Tribunal is justified in disallowing the deduction Under Section 80HH, 80I by misreading the facts and misplacing the reliance on the judgment for the issue not in dispute. b. Whether on the true and correct interpretation of the facts the deduction Under Section 80HH, 80I is to be allowed on the interest income being out of the debtors for the goods manufactured in the business.
(3.) LEARNED Counsel for the appellant contended that on similar facts the deduction was allowed for the previous years by the Tribunal but the same has been disallowed by the respondent for the years 1993 -94 and 1995 -96 and the benefit of the deduction under Sections 80HH and 80I was allowed to the appellant.;