A.K. Mathur, C.J.

1. This is a reference under Section 256(1) of the Income-tax Act, 1961, at the instance of the Revenue and the following question of law has been referred by the Tribunal for answer by this court:

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee-company is entitled to deduction under Sections 80HH and 80I of the Income-tax Act, 1961, in respect of weighment charges and interest receipts included in miscellaneous receipts ?"

2. The brief facts giving rise to this reference are that the assessee is a limited company deriving income from manufacturing of rice-bran oil, rice-bran oil extraction obtained in the manufacturing process apart from trading business in the above items such as extraction, soap stock, soyabean oil, mahua oil extraction, etc. While completing the assessment, the Assessing Officer noticed that the assessee has received power subsidy amounting to Rs. 1,45,526 which has been claimed to be exempt as being a capital receipt. We are not concerned in the present case with the issue of power subsidy. We are concerned with the fact that the Assessing Officer found that the assessee derived miscellaneous receipts in respect of weighment charges, miscellaneous receipts and truck tanker freight (Rs. 38,275, Rs. 2,47,115 and Rs. 5,51,861, respectively) totalling Rs. 8,37,251. The Assessing Officer did not allow relief under Section 80HH and Section 80I of the Act of 1961 on the ground that the income from the above sources was not income connected with the assessee's business. The Commissioner of Income-tax (Appeals) confirmed the finding of the Assessing Officer. The Tribunal held that the weightment charges are incidental to the assessee's business. Similarly, the Tribunal observed that miscellaneous receipts to the extent of Rs. 2,10,000 representing interest on deposits made with Paras Facts Pvt. Ltd., was with a view to run the business of the assessee properly. The Tribunal, therefore, held that this sum of Rs. 2,10,000 was also entitled to be considered for purposes of allowance under Sections 80HH and 80I of the Act of 1961. The Tribunal accordingly allowed the appeal of the assessee and permitted deduction under Sections 80HH and 80I. Hence, the Revenue approached the Tribunal for referring the matter to this court and the Tribunal has accordingly referred the aforesaid question of law for answer by this court. In the present reference, we are concerned only with weighment charges and interest receipts.

3. We have heard learned counsel for the parties and perused the record. The Assessing Officer as well as the Commissioner of Income-tax (Appeals) have negatived the contention of the assessee. However, the Tribunal has reversed the finding and held that these receipts are connected with the activity of business of the assessee and the assessee is entitled for benefit under Sections 80HH and 80I of the Act of 1961. Sections 80HH and 80I both very expressly lay down that "where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking ...... there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent. thereof". The words "derived from an industrial undertaking" would mean that the income has been derived from industrial activity which the industry is undertaking and it does not mean any industrial activity undertaken by the assessee. The words "industrial undertaking" have to be construed narrowly and it cannot be given a wide meaning. What is to be seen is as to what is the activity of the industrial undertaking of the assessee. In the present case, the essential activity of the industrial undertaking is the oil extraction plant. The industry is, therefore, entitled for all benefits under Sections 80HH and 80I of the Act