COMMISSIONER OF INCOME TAX Vs. ALPINE SOLVEX LTD.

JUDGEMENT

(1.) THIS is an appeal filed by CIT (Revenue) under Section 260A of the IT Act against an order dt. 24th Jan., 2004 passed by Tribunal in ITA No. 643/Ind/1997. This appeal was admitted for final hearing on following substantial questions of law: (1) Whether the Tribunal was justified in holding that the assessee is entitled for deduction under Sections 80HH and 80 -I of the IT Act, on the amount of Rs. 8,72,622 being the amount realized on sale proceeds of old gunny bags (packing material) which forms part of the total turnover? (2) Whether the sale amount realised out of old gunny bags which is not the real business of the assessee can be taken into account for the purpose of granting deduction under Sections 80HH and 80 -I ibid?

(2.) FACTS in brief to appreciate the issue involved in the appeal are these.

(3.) FOR the asst. yr. 1993 -94, the respondent (assessee) claimed special deduction under Sections 80HH and 80 -I on a sum of Rs. 8,73,622 being an amount realized by them (assessee) by sale proceeds of old gunny bags (packing material). It was made part of the total turnover of assessee (respondent herein) during the assessment year in question. So, the question that arose before the AO was, whether assessee (respondent) is entitled to claim deduction under Section 80HH/80 -I on the amount of Rs. 8,73,622 realized by assessee by sale of old gunny bags?