MS. SUPRIYA GILL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) These appeals are being disposed of by a single judgment as the question of law involved in both the appeal is the same and reads as follows:

(2.) It would not be out of place to mention that after the amendment made in Section 80IA by the Finance Act, 1999 with effect from 1-4-2000, Section 80IA was split into two parts and now Section 80IA applies to undertakings and enterprises engaged in infrastructure development and Section 80IB applies to other eligible business. The provisions of Section 80IB are pari materia with Section 80IA as they previously existed.

(3.) In the State of Himachal Pradesh there is scarcity of rail network. A scheme has been framed by the Central Government whereby freight/transport subsidy is provided to the industries set-up in remote areas where rail facilities are not available and some percentage of the transport expenses incurred by the industrial undertakings to transport raw material to the factory and to transport finished goods from their industries is subsidized by the Central Government. The question which arises is whether this freight subsidy is income derived from the business of the industrial undertaking and can be included in the profits eligible for deduction under Section 80IA.