PARLE PRODUCTS LIMITED Vs. DEPUTY COMMISSIONER OF INCOME TAX SPECIAL RANGE

JUDGEMENT

(1.) ASSESSEE M/s Parle Products Ltd. filed return for the assessment year 1990-91 declaring a total income of Rs.11,28,05,040/- after claiming various deductions. Assessing Officer vide his order dated 19th March 1993 amongst others recomputed the deductions under Section 32-AB of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') and reduced the excess claim and granted reduction under the said provisions of Rs.1,66,86,614/- and assessed total income on Rs.12,46,75,532/-. The Assessee challenged this order before the Commissioner of Income Tax (Appeals), Bombay, and questioned the correctness and legality of the said order with particular emphasis on incorrect computation of deduction under Section 32-AB of the Act. The Commissioner of Income Tax (Appeals) affirmed the findings recorded by the Assessing Officer and held as follows:-

(2.) THIS order of the Commissioner of Income Tax Appeals dated 18th May 1994 was challenged by the Assessee before the Tribunal. Before the Tribunal it was contended by the Assessee that items of income were eligible for deductions under Section 32-AB(1)(ii) and Part (ii) and (iii) of Schedule VI of the Companies Act. Eligible products worked out by the Assessee were arrived at after making the requisite adjustments and the whole amount calculated was entitled for deduction under Section 32-AB of the Act. The Tribunal accepted the contention raised on behalf of the Department that the law requires the Assessee to avail deduction under Section 32-AB(1)(i)(ii) with reference to the profits from eligible business only which also has to be computed in accordance with the provisions of the Companies Act, in preference to the contention of the Assessee. It will be useful to refer to the findings recorded by the Tribunal on this issue.

(3.) IT is not necessary for us to notice the facts in a greater detail except to the extent that the Assessee had claimed exemption under Section 32-AB of the Act to the extent of Rs.2,07,68,631/-. These were claimed in respect of interest on corporate deposits, other deposits, dividend income, etc. The computation by the Assessee had included all items of income without considering whether the same are in respect of business or not. The assessee is required to maintain one Profit and Loss Account and the onus to show the entries under the head 'other income' and to prove that the assessee is entitled to the benefit of the provisions of Section 32AB of the Act to show that the profits are from eligible business of the assessee, is upon the assessee.