-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1107 OF 2004 Parle Products Limited ) Nirlon House, 254-B ) Dr. A.B. Road, Worli, Mumbai 400 025 ).. APPELLANT Versus 1) The Deputy Commissioner of Income-Tax ) Special Range 5, Mumbai ) having his office at Aayakar Bhavan ) M.K. Road, Mumbai 400 020. ) 2) The Commissioner of Income-Tax, City ) having his office at Aayakar Bhavan ) M.K. Road, Mumbai 400 020. ).. RESPONDENTS Ms. R.M. Sidhwa for the Appellant. CORAM: SWATANTER KUMAR, C.J. AND A.P. DESHPANDE , J. JUDGMENT RESERVED ON : 9TH JULY 2008 JUDGMENT PRONOUNCED ON : 31ST JULY 2008 JUDGMENT : (PER SWATANTER KUMAR, C.J.) Assessee M/s Parle Products Ltd. filed return for the -2- 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. I have considered the arguments of the learned counsel but found no force in it. As regards the income by way of interest, dividend treated by the Appellant as business income while adjudicating the issue of education u/s. 32-AB of the Act I have held it to be income from other sources on which deduction u/s 32-AB was not allowable. The same finding will hold good here also. My findings in respect of the portion of interest on IDBI deposit, if any will also hold good here. The assessing Officer is therefore justified in not allowing deduction u/s 80-HHC on this amount. .... “ -3- 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. “10. Coming to the matter under consideration, we find that the burden was on the assessee to show that the amounts in question were its profits from eligible business. However, the assessee did not discharge the requisite burden that lay upon it by -4- establishing that the income in question was its profit from eligible business. The assessee persisted before the authorities below that the heads of income as prescribed under the Income-tax Act, 1961 were not relevant for allowing deduction u/s 32AB and that the profit computed in accordance with the Companies Act alone would form the basis for working out the deduction. Since both the authorities have already recorded a finding that the impugned amounts were not the profits of the assessee from its eligible business, we are left with no alternative but to respectfully follow the aforesaid two orders of the Tribunal cited above.” 3. Aggrieved from the order dated 25th June 2004 passed by the Income Tax Appellate Tribunal, the Assessee has preferred the present Appeal under Section 260A(1) of the Act before this Court. While raising the challenge to the concurrent findings afore-noticed, according to the Assessee, the following question of law falls for consideration of the Court :- “ Whether on the facts and circumstances of the case and in law, the Hon'ble Tribunal erred in not considering the following income viz. Interest on inter corporate deposits, interest on other deposits, Dividend income and dimunition in the value of investment as profit of business on which deduction u/s. 32AB was allowable ?” -5- 4. 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. 5. It is noticed from the impugned order that Schedule 13 forming part of the Profit and Loss Account, shows other income from non-trading investment, interest on bank deposit and an interest on other deposits. Thus, it was concluded that the assessee itself has treated the aforesaid items of income as other income in its accounts and the finding of the lower authorities that amounts did not represent the profit of the assessee from its eligible business was correct. The Tribunal relied upon the judgment of the Supreme Court in the case of -6- Apollo Tyres Ltd. vs. Commissioner of Income Tax, Kochi, (2002) 9 SCC 1. We may also notice that the word “eligible” from the expression “eligible business” stood deleted in the Statute by the Finance Act, 1989 with effect from 1st April 1991. However, the present case before us would be covered by the unaltered law and as such the principle enunciated by the Supreme Court in Apollo Tyres (supra) would squarely be applicable and answer the question sought to be raised in the present Appeal. In Apollo Tyres, the Tribunal had in fact recorded a finding of fact that the sale and purchase of units of UTI in the course of Assessee's business was an “eligible business” and, therefore, was granted requisite benefit. But, in the present case, the Assessee failed to discharge the onus to substantiate that it was profit arising from its eligible business. The learned Counsel appearing for the Appellant relied upon the judgment in The Commissioner of Income-tax Central-I/II, Mumbai vs. M/s. Parle Biscuits Limited, (Income Tax Appeal No.215 of 2002), where again the Division Bench of this Court had noticed that the Tribunal had recorded a finding that income from interest, rent, divided and profit on sale of tooth paste was from “eligible business” and as such permitted the deduction. That case is not applicable to the facts of the present case. The question of law has already been answered in -7- different judgments and the Tribunal has arrived at the conclusion on the basis of a finding of fact which calls for no interference by this Court. 6. Thus, in our view, no question of law, much less a substantial question of law, arises for consideration in the present case. The Appeal is accordingly dismissed. No order as to costs. CHIEF JUSTICE A. P. DESHPANDE, J.