Out of these two appeals, one is preferred by assessee and remaining one by Revenue. assessee has raised following grounds: "That CIT(A) (Central) was not justified to uphold action of assessing authority in having not allowed exemption under s. 10(33) on dividend income of Rs. 10,33,500. Even spirit of CBDT Circular No. 763, dt. 18th Feb., 1998 was not appreciated. That CIT(A) (Central) was further not justified in having not allowed deduction under s. 80-IA in respect of interest income at Rs. 20,42,542 and miscellaneous income at Rs. 7,90,690. That CIT(A) (Central) was not justified in confirming action of AO in adjusting unabsorbed deprecation of earlier years at Rs. 2,28,09,725 before allowing deduction under s. 80-IA. Notwithstanding, fact that specific ground of appeal was taken to effect that no interest under s. 234B should have been charged in absence of specific directions in this regard, such ground was not adjudicated in first appeal, issue being legal, charging of interest under s. 234B at Rs. 17,97,693 was not justified in ratio of Supreme Court judgment in case of CIT vs. Ranchi Club Ltd. (2000) 164 CTR (SC) 200: (2001) 247 ITR 209 (SC)." assessee in its return declared nil income and deemed income of Rs. 60,18,557 under s. 115JA was filed on 30th Nov., 1998 which was processed under s. 143(1)(a) on 9th Dec., 1998. statutory notices under s. 143(2) and detailed questionnaire was served upon assessee. assessee is manufacturer of fertilizer and paper. assessee received dividend income amounting to Rs. 10,33,550. He claimed same as exempt both under ss. 10(33) and 115JA in computation of total income. On scrutiny of return, AO found that assessee received this dividend income before 1st of June, 1997 and TDS on such income has not been deducted. On asking, assessee vide its letter dt. 7th Oct., 2000 claimed that same is exempt under s. 10(33) of Act. AO held that dividend income will be taxable and, therefore, added to total income. assessee also advanced, interest-free amounts to Uma Khanna, Abhishek Indl. Corpn and Trident Udyog Ltd. As per AO, assessee- company was incurring huge interest liability by taking term loan for financing its expansion plans and on other hand giving interest-free loans to sister- concerns instead of utilizing funds for purpose for which they were taken and thus disallowed interest and added Rs. 44,34,980 as income of assessee. AO also disallowed claimed deduction under s. 80-IA in respect of interest income at Rs. 20,42,542 and miscellaneous income at Rs. 7,90,690. AO adjusted unabsorbed depreciation of earlier years at Rs. 2,28,09,725 before allowing deduction under s. 80-IA. Interest under s. 234B was also charged. assessee challenged assessment order before learned CIT(A), where appeal of assessee was partly allowed. Now, assessee is in further appeal before Tribunal. At. time of hearing, we have heard Shri Ashwani Kumar, learned chartered accountant for assessee and Shri Ravi Aggarwal learned Departmental Representative for Revenue. On perusal of record and after considering rival contentions put forth by both learned representatives, it is seen that issue of exemption under s. 10(33) on dividend income is covered against assessee by decision of Tribunal in case of Smt. Madhu Gupta (ITA No. 594/Chandi/2004). Sec. 10(33) as it existed at relevant point of time is as under: "(33) Any income by way of (i) dividends referred to in s. 115-O; or (ii) income received in respect of units from Unit Trust of India established under Unit Trust of India Act, 1963 (52 of 1963); or (iii) income received in respect of units of mutual fund specified under cl. (23D)" So it is clear from plain language of s. 115-O r/w s. 10(33) that exemption in hands of recipient of dividend is available only in respect of dividends which have been declared by domestic companies on or after 1st dividends which have been declared by domestic companies on or after 1st day of June, 1997. Sec. 10(33) and s. 115-O may be applicable from asst. yr. 1998-99. Nevertheless, said section specifically provides for exemption in dividends declared only on or after 1st day of June 1997. In view of these facts, this ground of assessee is dismissed. next ground pertains to deduction under s. 80-IA in respect of interest income at Rs. 20,42,542 and miscellaneous income at Rs. 7,90,690 is also covered against assessee by decision of Hon ble apex Court pronounced in case of Pandian Chemicals Ltd vs. CIT (2003) 183 CTR (SC) 99: (2003) 262 ITR (SC) 278. While computing deduction AO excluded interest income and miscellaneous income. Hon ble apex Court clearly held that deposit made with Electricity Board for supply of Electricity and interest from business of such deposits is not derived from business of such undertaking. Hon ble apex Court further held that word derived from must be understood as something which has direct or immediate nexus with assessee s industrial undertaking and thus could not be said to flow directly from industrial undertaking itself and thus special deduction is not allowable. Hon ble apex Court approved decision of Hon ble High Court of Madras pronounced in CIT vs. Pandian Chemicals Ltd. (1998) 147 CTR (Mad) 5: (1998) 233 ITR 497 (Mad). So this ground of assessee is also dismissed. Ground No. 3 for adjusting unabsorbed depreciation of earlier years before allowing deduction under s. 80-IA and interest under s. 234B were not pressed during arguments by assessee, same is dismissed as not pressed. In result appeal of assessee is dismissed. Stand of learned CIT(A) is upheld. We shall take up appeal of Revenue in which following grounds have been raised: "1. learned CIT(A) has erred both in law and on facts of case in deleting disallowance made by AO on account of interest of Rs. 44,34,980 on interest-free loans given to sister-concerns. learned CIT(A) has erred both in law and on facts in treating Insurance claim of Rs. 16,38,501 as business receipts derived from industrial undertaking which is includible for purpose of computing deduction under s. 80-IA." AO made addition of Rs. 44,34,980 on account of interest on interest-free loans/advances which were claimed to be advanced out of surplus funds to sister-concern without charging any interest. AO held that assessee has not used these funds for which purpose for these were taken. assessee also received Rs. 16,38,501 as insurance claim during course o f business and claimed deduction under s. 80-IA which was disallowed. assessee successfully carried same in appeal before learned CIT(A). Now Revenue is aggrieved and is in appeal before Tribunal. During arguments we have heard Shri Ravi Aggarwal, learned Departmental Representative for Revenue and Shri Ashwani Kumar learned chartered accountant for assessee. In nutshell learned Departmental Representative supported orders o f AO whereas Shri Ashwani Kumar supported orders of first appellate authority. Mr. Aggarwal contended that assessee is not eligible for deduction under s. 80-IA and on issue of interest-free loans to sister- concerns, it was contended that no nexus was established by assessee. After hearing rival contentions and on perusal of record it is seen that Chandigarh Benches of Tribunal in case of assessee itself on issue of interest-free loans to sister-concerns by following decision of Tribunal wherein appeal of Department in ITA No. 729/Chd/2000 for asst. yr. 1996-97 decided issue against Revenue and in favour of assessee. Since facts under consideration are also similar to facts already decided by Tribunal, respectfully following same that is too in case of assessee this ground of Revenue deserves to be dismissed. However, learned Departmental Representative relied upon certain judicial pronouncements and contended that these judicial pronouncements were not considered by Tribunal at earlier occasion. On perusal of record, we have found that during arguments of ITA Nos. 838, 842, 841/Chd/2000, both learned representatives were same and on asking specific question by Bench to learned Departmental Representative whether these judicial pronouncements were brought to notice of Bench, specific reply was "no . Under these circumstances, we are of view that there was no occasion for Bench to consider these judicial pronouncements. In ITA No. 838/Chandi/2000 similar issue, i.e., interest-free loans to sister-concerns was discussed in detail and relevant findings which are available at p. 14 in ITA No. 729/Chandi/2000 are reproduced as under: "10 Ground No. 2 of appeal of Revenue relates to disallowance of interest of Rs. 52,43,188 on interest-free loans given to sister-concern. relevant and material facts for disposal of this ground of appeals are that assessee-company has advanced interest-free loans to its sister- concern. Withdrawals for these loans were from cash credit account. AO concluded that withdrawals from cash credit accounts are those borrowing on which company is paying interest and diversion thereof would restrict deduction admissible under s. 36(1)(iii) of Act and accordingly he disallowed sum of Rs. 52,45,188. On appeal, CIT(A) deleted impugned addition after considering submissions of assessee. At outset of assessment proceedings, learned Authorised Representative for assessee submitted that identical issue as involved in instant ground of appeal of Revenue camp up for consideration before Tribunal, Chandigarh Bench, in case of this very assessee for asst. yrs. 1993-94, 1994-95 and 1995-96 in ITA Nos. 19, 142, 347/Chd/1997 and Tribunal vide its order dt. 26th May, 2004 decided issue in favour of assessee and against Revenue by making following observations: Before us, learned Authorised Representative for assessee referring to order dt. 22nd Aug., 2002 of Tribunal, Chandigarh Bench, in ITA No. 1145/Chd/1995 asst. yr. 1990-91 and order dt. 25th July, 2001 in ITA No. 225/Chd/1995 asst. yr. 1991-92, submitted that this issue decided in favour of assessee and against Revenue by orders of Tribunal dt. 22nd Aug., 2002 and 25th July, 2001 (supra) and so respective grounds of appeals of assessee pertaining to disallowance of interest are required to be allowed because CIT(A) in his order, while sustaining these disallowances has relied upon his earlier appellate orders passed in asst. yrs. 1991-92, 1992- 93 and 1993-94. Learned Departmental Representative for Revenue was fair enough to concede on this issue. In this view of matter and respectfully following orders for Tribunal dt. 22nd Aug., 2002 and 25th July 2001 (supra), issue involved in above mentioned grounds of appeal of assessee is decided in favour of assessee and against Revenue. Accordingly, impugned orders of CIT(A) sustaining impugned disallowance pertaining to interest as stated above, are set aside and ground No. 1(ii) of ITA No. 19/Chandi/1997, ground No. 1 of ITA No. 142/Chandi/1997 and ground No. 2 of ITA No. 347/Chandi/1997 pertaining to disallowance of interest of Rs. 7,73,518, Rs. 7,74,940 and Rs. 5,24,250, respectively by tax authorities below out of interest payment claimed by assessee on account of interest-free loans given for non- business purposes out of other profit account, are allowed. Thus learned Authorised Representative for assessee submitted that issue involved in ground No. 2 of instant appeal of Revenue is liable to be decided against Revenue and in favour of assessee Learned Departmental Representative for Revenue was fair enough to concede on issue In this view of matter and respectfully following order dt. 26th May, 2004 (supra) of Tribunal, issue involved in ground No. 2 of instant appeal of Revenue is decided against Revenue and in favour of assessee. Accordingly, we uphold impugned order of CIT(A) and reject ground No. 2 of instant appeal of assessee." In Para 10.4 at p. 16 of said order it has been specifically mentioned that learned Departmental Representative for Revenue was fair enough to concede on issue and in view for these facts, issue was decided against Revenue and in favour of assessee. Keeping in view parity with judicial pronouncements of Hon ble Bench, this issue is decided in favour of assessee specially when facts under appeal are similar to earlier years. next ground pertains to insurance claim of Rs. 16,38,501 as business receipts claimed to be derived from industrial undertaking which is includible for propose of computable deductions under s. 80-IA of Act. Our attention was drawn by learned Departmental Representative to decision of Hon ble jurisdictional High Court in IT Ref. No. 86 of 1995 in case of CIT vs. Khemka Container (P) Ltd. [reported at (2005) 193 CTR (P&H) 427 Ed.] wherein at instance of Revenue, similar question was referred for opinion of Hon ble Court under s. 256(1) of Act. Hon ble Court relied upon decision of Hon ble apex Court pronounced in case of Pandian Chemical Ltd. vs. CIT (supra), decision from Hon ble Calcutta High Court in case of CIT vs. Andaman Timber Industries Ltd. (2000) 158 CTR (Cal) 458: (2000) 242 ITR 204 (Cal), judgment of Hon ble Gauhati High Court in case of North East Gases (P) Ltd. vs. CIT (1997) 139 CTR (Gau) 501: (1996) 220 ITR 372 (Gau) and also decision from Hon ble apex Court in CIT vs. Sterling Foods (1999) 153 CTR (SC) 439: (1999) 237 ITR 579 (SC), wherein expression "derived from industrial undertaking" used in s. 80-I of Act was considered. In case of Pandian Chemicals (supra) it was observed by Hon ble apex Court as under: "..... It is clear, therefore, that words "derived from" in s. 80HH of IT Act, 1961 must be understood as something which has direct or immediate nexus with appellant s industrial undertaking. Although, electricity may be required for purposes of industrial undertaking, deposit required for its supply is step removed from business of industrial undertaking. derivation of profits on deposit made with electricity board cannot be said to flow directly form industrial undertaking itself." Similarly in Sterling Food (supra), question was whether income derived by assessee by sale of import entitlements was profit and gain "derived from" its industrial undertaking of processing sea food. Answering question in favour of Revenue, apex Court observed: "We do not think that sources of import entitlements can be said to be industrial undertaking of assessee. source of import entitlements can, in circumstances, only be said to be export promotion scheme of Central Government whereunder export entitlements become available. There must be, for application of words derived from , direct nexus between profit and gain and industrial undertaking, In instant case, nexus is not direct but only incidental. industrial undertaking exports processed sea food. By reason of such export, export promotion scheme applied. Thereunder, assessee is entitled to import entitlements, which it can sell. sale consideration therefrom cannot, in our view, be held to constitute profit and gain derived form assessee s industrial undertaking". In case of North East Gases (supra) question was whether income derived from interest could be treated as income derived from industrial undertaking. It was held that since sources of income did not emerge from running of undertaking, income is not held to be income derived from industrial undertaking. In present case, respectfully following aforesaid judicial pronouncements, we are of view that insurance claim of Rs. 16,38,501 cannot be said to be derived from industrial undertaking for purposes of deduction under s. 80-IA of Act. However in view of specific observation of Hon ble jurisdictional High Court in case of Khemka Container (P) Ltd. (supra) for purpose of deduction under s. 80-I what has to be excluded is not gross receipts but income arising out of these receipts. Such income can only be computed by deducting cost from gross receipts of insurance claim. AO is directed to recompute deduction in light of observation of Hon ble jurisdictional High Court. . This appeal of Revenue is disposed of in above said manner. *** VARINDRA AGRO CHEM LTD. v. DEPUTY COMMISSIONER OF INCOME TAX