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The relevant portion of the order is as under: “13.
Before analyzing Section 80-IB, as a prefatory note, it needs to be mentioned that the 1961 Act broadly provides for two types of tax incentives, namely, investment linked incentives and profit linked incentives.
Herein also, the Apex Court opined that where the nexus between the income and the industrial undertaking was not direct but was only incidental, it would not fall within the expression ‘profits derived from industrial undertaking’.
Similar is the decision of the Hon’ble Apex Court in the case of Pandian Chemicals Ltd. Their Lordships, in the aforesaid case, were dealing with the question as to whether the interest derived from the deposit made with the Electricity Board could be construed as a profit derived from the industrial undertaking of the assessee for the purposes of deduction under Section 80HH.
Ownership of a ship per se will not attract Section 80-IB (6).
It is the profits arising from the business of a ship which attracts sub-section (6).
The phrase derived from used in the Sections 80IA(1) and 80IB(1) of the Act is highlighted for reference below:-“80-IA.(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise…………………..
What attracts the incentives under Section 80-IA/80-IB is the generation of profits (operational profits).