ITA No. 1341/1997 is filed by Revenue for asst. yr. 1994-95 and ITA Nos. 2781/Mad/1995, 1257 and 2165/Mad/1996 and 804/Mad/1997 are filed by assessee for asst. yrs. 1988-89, 1992-93, 1993-94 and 1994-95, respectively. Since common issue arises for consideration in all appeals, we heard same together and disposing of same by this common order. Let us first take assessee s appeal for asst. yr. 1988-89 in ITA No. 2781/Mad/1995. first issue is regarding deduction under s. 32AB of IT Act. Mr. R. Vijayaraghavan, learned counsel for assessee submitted that AO set off carried forward unabsorbed investment allowance and thereafter rejected claim of assessee on ground that there was no positive profit for grant of deduction under s. 32AB. According to learned counsel, deduction under s. 32AB should be computed before setting off of carried forward unabsorbed investment allowance. On contrary, Mr. K. Srinivasan, learned Departmental Representative (DR) submitted that deduction under s. 32AB could be allowed on income computed as per provisions of ss. 28 to 32A. Therefore, carried forward investment allowance has to be first set off before grant of deduction under s. 32AB. Once carried forward investment allowance was set off there is no business income for assessee for grant of deduction under s. 32AB, therefore, assessee is not entitled to deduction under s. 32AB. We have considered rival submissions on either side, also carefully g o n e through order of lower authorities and perused material available on record. As rightly submitted by learned Departmental Representative, total income for purpose of deduction under s. 32AB has to be computed as per provisions of ss. 28 to 32A. Therefore, investment allowance carried forward has to be set off for purpose of computing total income of assessee. Once carried forward investment allowance was set off, admittedly, assessee has no positive income for purpose of grant of deduction under s. 32AB. Therefore, in our opinion, lower authorities have rightly rejected claim of assessee for grant of deduction under s. 32AB. We do not find any infirmity in order of lower authority on this issue. Accordingly, we confirm same. next ground of appeal is regarding claim of assessee for depreciation on bricks. learned counsel for assessee Mr. R. Vijayaraghavan submitted that assessee has purchased special type of bricks for Cupola. Each brick was (of) less than Rs. 5,000. Therefore, according to learned counsel, assessee was entitled to depreciation at rate of 100 per cent. learned counsel for assessee placed his reliance on judgment of Madras High Court in case of First Leasing Co. of India Ltd. vs. CIT (2000) 164 CTR (Mad) 179: (2000) 244 ITR 238 (Mad) and submitted that each bottle was considered to be plant and depreciation was allowed at rate of 100 per cent. On contrary, Mr. K. Srinivasan, learned Departmental Representative submitted that brick by itself cannot be considered to be plant. Brick may be one of items for purpose of fabricating or constructing plant. Therefore, brick cannot be equated with that of bottle. Therefore, according to learned Departmental Representative, assessee was not entitled to any depreciation. We have considered rival submissions on either side, and also perused material available on record. Admittedly, assessee purchased bricks and each brick was less than Rs. 5,000. claim of assessee is that brick is special type. Even though assessee claims that brick is special type, no material is available on record to show that brick is special type. As rightly submitted by learned Departmental Representative, brick may be one of materials for purpose of construction or fabrication of plant or factory. However brick itself cannot be considered to be asset individually for purpose of grant of depreciation. We have also carefully gone through judgment of Madras High Court in case of First Leasing Co. of India (supra). In case before Madras High Court, assessee purchased bottles which were used as container for soft drinks and beverages. Each bottle was considered as independent and separate unit for purpose of usage. On those factual circumstances, Madras High Court held that each bottle is independent plant. In this case, brick cannot be used independently for any independent function or usage. As rightly submitted by learned Departmental Representative, it may be one of materials for purpose of construction of asset. Therefore, in our opinion, assessee is not entitled to depreciation as claimed. We do not find any infirmity in order of lower authority. Accordingly, we confirm same. In result, appeal filed by assessee for asst. yr. 1988-89 in ITA No. 2781/(Mad/1995 stands dismissed. However, there will be no order as to cost. Let us now take ITA Nos. 1257 and 2165/Mad/1996 and 804/Mad/1997. These appeals of assessee are for asst. yrs. 1992-93, 1993-94 and 1994-95. first issue arises for consideration is regarding depreciation consequent to assessment under s. 115J. During course of hearing, Mr. R. Vijayaraghavan, learned counsel for assessee very fairly conceded that on identical set of facts, Supreme Court in case of Karnataka Small Scale Industries Development Corpn. Ltd. vs. CIT (2003) 179 CTR (SC) 1: (2002) 258 ITR 770 (SC) decided very same issue against assessee. In view of above submission of learned counsel for assessee, order of CIT(A) on this issue is confirmed. next ground of appeal is regarding deemed income in case of non- performing asset. Mr. R. Vijayaraghavan, learned counsel for assessee submitted that AO included sum of Rs. 26,98,000 and another sum of Rs. 10,75,315 being amount due from customers in respect of hire-purchase and leasing transaction, respectively. According to learned counsel, during relevant year these amounts are sticky in nature and there is no certainty for recovery. Since assessee has not recovered any amount and there is no scope for recovery in future, according to learned counsel, deemed income cannot be included for purpose of taxation. learned counsel for assessee further submitted that similar issue came before this Tribunal in case of India Equipment Leasing Ltd. vs. Dy. CIT (ITA No. 787/Mad/1998). This Tribunal by order dt. 14th Sept., 2004, on identical set of facts, held that income by way of interest which is sticky nature could not be recognized. Accordingly, similar addition was deleted by Tribunal in abovesaid case. On contrary, learned Departmental Representative submitted that he is placing reliance on observation made by lower authorities. We have considered rival submissions on either side, and also perused material available on record. Admittedly, assessee has not received any income which is admittedly, sticky in nature. This issue was considered by Supreme Court in case of UCO Bank vs. CIT (1999) 154 CTR (SC) 88: (1999) 237 ITR 889 (SC) and it was held that income which was sticky in nature could not be included in total income. similar issue was considered by this Tribunal in case of India Equipment Leasing Ltd. (supra) by order d t . 14th Sept., 2004. After referring to earlier decision in ITA No. 2522/Mad/1996, dt. 19th Sept., 2003, Tribunal held that similar income from lease and hire-purchase contract which are sticky in nature cannot be included in total income. By respectfully following judgment of Supreme Court in case of UCO Bank (supra) and reasons stated by this Tribunal in case of India Equipment Leasing Ltd. (supra), in our opinion, deemed income which are sticky in nature cannot be included in total income. Accordingly, we set aside order of lower authority on this issue and direct AO to delete abovesaid amount while computing taxable income. next issue arises for consideration is regarding expenses for earning dividend. We heard both representatives of assessee and Revenue. CIT(A) estimated expenditure for purpose of earning interest at 25 per cent. learned counsel for assessee submitted that on identical set of facts, this Tribunal estimated 2 per cent of gross dividend as reasonable expenditure. However, learned Departmental Representative submitted that he is placing his reliance on observation made by lower authorities. Admittedly, identical set of facts, this Tribunal estimated 2 per cent of gross dividend for purpose of deduction under s. 80M. In this case, first Appellate authority estimated 25 per cent of gross dividend towards expenditure. Since on identical set of facts in case of Sundaram Finance Ltd. (IT Appeal No. 1229/Mad/1992, dt. 2nd Dec., 2002), this Tribunal estimated expenditure at rate of 2 per cent of gross dividend, for sake of consistency and for reasons stated in above order of this Tribunal, we direct AO to recompute deduction under s. 80M after taking 2 per cent of gross dividend as expenditure. next ground of appeal is regarding inams. We heard both representatives of assessee and Revenue. It appears from order of CIT(A) that this ground was not pressed before CIT(A). Since assessee has not pressed this ground before first appellate authority, in our opinion, very same issue cannot be raised before this Tribunal. Even otherwise, it appears from order of lower authority that inams were not related to business expenditure. Therefore, we do not find any infirmity in order of lower authority. Accordingly, we confirm same. next issue for asst. yrs. 1993-94 and 1994-95 is regarding debenture premium expenses. assessee claimed that entire premium should be allowed in first year. However, first Appellate authority allowed claim of assessee on pro rata basis. After hearing learned Departmental Representative and learned counsel for assessee, we find that order of CIT(A) is perfectly justified. In view of judgment of Supreme Court in case of Madras Industrial Investment Corpn. Ltd. vs. CIT (1997) 139 CTR (SC) 555: (1997) 225 ITR 802 (SC), assessee is entitled for pro rata basis. Therefore, we do not find any infirmity in order of lower authority. Accordingly, we confirm same. In result, assessee s appeals in ITA Nos. 1257 and 2165/Mad/1996 and ITA No. 804/Mad/1997 are partly allowed. Now coming to Revenue s appeal in ITA No. 1341/Mad/1997 for asst. yr. 1994-95. first issue is regarding debenture premium expenses. We heard both representatives of assessee and Revenue. first Appellate authority directed AO to verify claim of assessee on pro rata basis. In view of judgment of Supreme Court in case of Madras Industrial Investment Corpn. Ltd. (supra), we do not find any infirmity in order of lower authority. Accordingly, we confirm same. next issue is regarding higher depreciation on leased vehicle. We heard both representatives of assessee and Revenue. It is very fairly conceded that in view of Madras High Court in case of CIT vs. Madan & Co. (2002) 174 CTR (Mad) 172: (2002) 254 ITR 445 (Mad), assessee is entitled to higher rate of depreciation on leased vehicle. In view of judgment of Madras High Court in case of Madan & Co. (supra), we do not find any infirmity in order of lower authority. Accordingly, we confirm same. next issue is regarding short-term capital loss. first appellate authority found that consequent to order for asst. yrs. 1992-93 and 1993- 94, effect of capital loss carried forward and set off should be allowed by AO. It was very fairly conceded by both representatives of assessee and Revenue that it is only consequential to earlier order. In view of above, we do not find any infirmity in order of lower authority. Accordingly, we confirm same. next ground of appeal is regarding contingent deposit collected by assessee. Mr. R. Vijayaraghavan, learned counsel for assessee submitted that assessee challenged levy of sales-tax to lease transaction. Madras High Court stayed levy of sales-tax. However, assessee collected contingent deposit as sales-tax during pendency of writ petition before High Court. Since applicability of sales-tax itself was stayed by High Court, amount collected by assessee would not form part of total income. On contrary, Mr. K. Srinivasan, learned Departmental Representative submitted that assessee collected amount towards its possible sales-tax liability in case it looses its case in writ petition before High Court. Therefore, merely because it was collected in name of deposit, it will not change characteristics of receipt. Even though assessee collected amount as deposit, it is only for purpose of meeting statutory liability towards payment of sales-tax in case assessee fails in w r i t petition before High Court. Therefore, according to learned Departmental Representative this collection for meeting statutory liability would form part of trading receipt, therefore, it has to be included in total income. learned counsel for Revenue placed his reliance on judgment of Madras High Court in case of CIT vs. Southern Explosives Co. (2000) 242 ITR 107 (Mad) and also judgment of Supreme Court in case of Chowringhee Sales Bureau (P) Ltd. vs. CIT 1973 CTR (SC) 44: (1973) 87 ITR 542 (SC). learned counsel for Revenue also placed his reliance on judgment of Supreme Court in case of K.C.P. Ltd. vs. CIT (2000) 162 CTR (SC) 320: (2000) 245 ITR 421 (SC). We have considered rival submissions on either side, and also perused t h e material available on record. Admittedly, assessee has collected amount to meet statutory liability in case it looses its case in writ petition before High Court. We have also carefully gone through judgment of Madras High Court in case of Southern Explosives Co. (supra). assessee collected 4 per cent on price of goods as sales-tax and paid same to Government. assessee has also collected another 4 per cent on price of goods as deposit against sales-tax and surcharge. However, assessee contended before sales-tax authorities that detonator sold by assessee was subjected to lower rate of sales-tax. In spite of this contention, assessee proceeded to collect 4 per cent extra in name of deposit. On those factual circumstances, Madras High Court, after considering judgment of Supreme Court in case of Chowringhee Sales Bureau (P) Ltd. (supra), observed as follows: "The true character of receipt must be judged with reference to reasons for collection and liability for meeting which collection was made. When liability is statutory liability, which assessee was required to meet and for meeting which it was by statutes or authorities permitted to collect amount required from its customers, true character of collection is trading receipt. By calling portion of deposit, it cannot be said that assessee had constituted itself as trustee, and, therefore, amounts received were not required to be regarded as part of its trading receipt." Therefore, it is very clear that true character of receipt has to be judged with reference to reason for collection. In this case, admittedly assessee collected amount in order to meet its statutory liability. Therefore it will form part of trading receipt. Merely because assessee called same as deposit, it cannot be excluded from trading receipt so long as it is collected for purpose of meeting statutory liability. We have also carefully gone through judgment of Madras High Court in case of CIT vs. South India Sugars Ltd. (2001) 166 CTR (Mad) 446: (2001) 248 ITR 92 (Mad). In this case, assessee collected excess price fixed for levy sugar after obtaining interim order from Court. In those factual circumstances, Madras High Court held that since assessee was liable to refund amount which was ascertainable and quantify, it cannot be included in total income. After going through judgment of Madras High Court in case of South India Sugars Ltd. (supra), we find that assessee collected amount towards price of levy sugar. Price of levy sugar may not be considered to be statutory liability like sales-tax. In view of judgment of Supreme Court in case of Chowringhee Sales Bureau (P) Ltd. (supra) and judgment of Madras High Court in case of Southern Explosives Co. (supra), amount collected to meet statutory liability has to be treated only as trading receipt. Since assessee before Madras High Court in case of South India Sugars Ltd. (supra) collected excess price for sale of levy sugar which is not statutory liability, in our opinion, this judgment of Madras High Court is not applicable with regard to collection of sales-tax which is statutory liability. Moreover, in view of judgment of Supreme Court in case of Kedarnath Jute Mfg. Co. Ltd. vs. CIT (1971) 82 ITR 363 (SC) and in case of Polyflex (India) (P) Ltd vs. CIT (2002) 177 CTR (SC) 93: (2002) 257 ITR 343 (SC) amount collected by assessee to meet sales-tax liability has to be treated as trading receipt. Therefore, in our considered opinion, judgment of Madras High Court in case of South India Sugars Ltd. (supra) may not be applicable to facts of case. In view of above discussion, in our opinion, judgment of Madras High Court in case of Southern Explosives Co. (supra) and judgment of Supreme Court in case of Chowringhee Sales Bureau (P) Ltd. (supra) would be squarely applicable to facts of present case. Accordingly, we set aside order of CIT(A) and restore that of AO. In result, Revenue s appeal in ITA No. 1341/Mad/1997 is partly allowed. However, there will be no order as to cost. *** DEPUTY COMMISSIONER OF INCOME TAX v. SUNDARAM FINANCE LTD.