( 1 ) THE assessment year in question is 1984-85. The following question was referred under Section 256 (1) of the Income Tax Act, 1961 to the High court:"whether on the facts and in the circumstances of the case, the appellate Tribunal was right in holding that the interest on deposits with tamil Nadu Electricity Board should be treated as income derived by the industrial undertaking for the purpose of Section 80-HH?"

( 2 ) THE Court followed its earlier decision in CIT v. Pandian Chemicals ltd. and answered the question in favour of the Department and against the assessee.

( 3 ) THE appellant preferred two special leave petitions; the first from the decision in CIT v. Pandian Chemicals Ltd. being SLP (C) No. . . . CC No. 3017 of 2000 and the second being the present appeal. As far as the first matter was concerned, the special leave petition was dismissed on the ground of delay. The question of law was left open. We have therefore to consider whether, on merits, the decision of the High Court in adopting the reasoning given in Pandian Chemicals was correct.

( 4 ) SECTION 80-HH of the Income Tax Act grants deduction in respect of profits and gains "derived from" an industrial under