SHARAVATHY STEEL PRODUCTS PVT LTD Vs. INCOME TAX OFFICER WARD 12(2)

JUDGEMENT

(1.) THIS appeal is by the assessee being aggrieved by the order of the Tribunal dismissing its appeal by holding that the assessee is not eligible for deduction under Section 80 IA of the Act.

(2.) THE assessee is a Private Limited Company carrying on the business of manufacture and supply of M.S. Wires and G.I. Wires For the relevant assessment year 1996 -97, the assessee filed its return of income which included the income derived as net commission to an extent of Rs. 26,12,576/ -. The assessee accordingly claimed the deduction under Section 80IA towards the said amount. The Assessing Officer disallowed the claim on the ground that the assessee has earned the commission as an agent to supply certain goods and hence, this cannot be the activity of the assessee. Aggrieved by the same, the assessee preferred an appeal to the Commissioner who dismissed it. Aggrieved by the same, the assessee preferred an appeal to the Tribunal, wherein the order of the Assessing Officer and Appellate Authority were confirmed and the appeal was dismissed. Hence the present appeal by the assessee.

(3.) THE learned Counsel appearing for the appellant -assessee by placing reliance on the provisions of Section 80IA submitted that the income earned by the assessee would include the income earned as e commission for the services rendered. That the assessee has rendered the services since the assessee was in the said line of business and therefore, there was direct nexus with the business of the assessee. If is further contended that even though the Appellate Commissioner has opined that the commission income earned by the assessee is attributable to its business but held that the assessee is not eligible for' deduction under Section 80IA. Therefore, he pleads that the authorities committed an error in misreading and misapplying Section 80IA of the Act. That the assessee is entitled for the deductions claimed.