only ground taken by assessee in this appeal is that lower authorities erred in treating amount of Rs. 15 lakhs, received by assessee-firm as income from other sources instead of income from business. In course of assessment proceedings, AO found that assessee received commission of Rs. 15 lakhs from M/s Adani Exports Ltd. This income was claimed to be not includible in total income under s. 10B of Act. assessee was required to substantiate aforesaid claim. It was clarified that this amount was received from M/s Adani Exports Ltd. on third party export as per Import-Export Policy, as assessee had made joint exports. amount w s paid by them to meet direct and indirect expenses. Therefore, it was contended that income could not be treated as income from other sources. However, AO did not accept contention of assessee and held impugned amount as income from other sources, consequently, denying exemption under s. 10B to assessee on this amount. Aggrieved by this order, assessee filed appeal before learned CIT(A). It was stated that assessee had entered into agreement with M/s Adani Exports Ltd. for export of its goods through them. It received additional incentive of Rs. 15 lakhs from them, which was nothing but reimbursement of expenses incurred by assessee. learned CIT(A) considered facts of case and submissions made before him. It was pointed out that alleged expenses for which reimbursement was stated to have been made by M/s Adani Exports Ltd. were normal business expenses of assessee and as such there was no justification to claim that payment amounted to reimbursement of expenses. It was further pointed out that s. 10B exempts profits and gains which have been derived from export of articles or things etc. There was difference between expression any profits and gains derived , which was narrower term than term any profits and gains of business . In view of aforesaid distinction, it was held that AO was justified in treating income as income from other sources. Before us, learned counsel for assessee pointed out that assessee exports goods inter alia through M/s Adani Exports Ltd., approved export house. question in this case is whether receipt of Rs. 15 lakhs amounts to income derived from activity of exports? He referred to p. 11 of paper book, being disclaimer certificate issued by assessee in favour of M/s Adani Exports and it is stated therein that it shall have no objection to M/s Adani Exports Ltd. claiming relevant export house benefits and incentives as per para 3.7.2.1(vi) of Exim Policy 2003 - 2007, as amended on 31st March, 2003. It was further pointed out that exports were made in name of assessee through Adani Exports Ltd., as seen from pp. 9 and 10 of paper book. assessee was entitled to exemption under s. 10B, but other benefits under Exim Policy were passed on to M/s Adani Exports Ltd. In lieu thereof, assessee received impugned sum of Rs. 15 lakhs. It was his case that this amount represented income derived from export activity of newly established 100 per cent export-oriented undertaking, as envisaged under s. 10B of Act. In this connection, he referred to order of Hon ble Tribunal, Delhi Bench B , in case of National Thermal Power Corpn. Ltd. vs. Addl. CIT (2004) 91 TTJ (Del) 1075: (2004) 91 ITD 101 (Del), in which it was held that there was no scope of notional expenditure in computing profits if no expenditure has been incurred for use of any material or service. Therefore, it was contended that learned CIT(A) wrongly relied on this case to hold that income was income from other sources. Further, he referred to order of Hon ble Tribunal, Chandigarh Bench , in case of Nahar Exports Ltd. vs. Asstt. CIT (2005) 93 TTJ (Chd) 186: (2005) 92 ITD 484 (Chd), case decided under s. 80HHC of Act, in which it was held that treatment of trading and manufacturing activities separately by AO was one possible view and, therefore, CIT could not have held order to be erroneous and prejudicial to interests of Revenue. It was his case that learned CIT(A) wrongly relied on this case to hold that impugned receipt of assessee was income from other sources. He also referred to order of Hon ble Tribunal, Ahmedabad Bench (Special Bench) in case of Nirma Industries Ltd. vs. Asstt. CIT (2005) 95 TTJ (Ahd)(SB) 867: (2005) 95 ITD 199 (Ahd)(SB), in which it was held that interest on deposit with bank, IDBI and other companies cannot be said to be income derived from industrial undertaking and, therefore, it would not qualify for deduction under s. 80-I. Such was also finding in respect of interest received on delayed payment of sale proceeds. It was his case that there was direct nexus between receipt and business of assessee i n respect of receipt of Rs. 15 lakhs, while no such direct nexus was there in respect of interest received by that assessee. Therefore, reliance placed on this case was also misplaced. He also referred to order of Hon ble Tribunal, Chennai Bench B , in case of Orchid Chemicals & Pharmaceuticals Ltd. vs. Jt. CIT (2005) 98 TTJ (Chennai) 32: (2005) 97 ITD 277 (Chennai), in which it was held that deduction under s. 10B was not admissible in respect of interest income earned by export-oriented unit from margin money placed with bank for obtaining letter of credit for import of raw material. Tribunal distinguished between words derived from and attributable to and pointed out that former expression is narrower than latter. It was his case that decision of Hon ble Tribunal in this case supports view that income is taxable under head Profits and gains of business . Therefore, it was argued that learned CIT(A) erred in holding that income was taxable under head Income from other sources . In reply, learned Departmental Representative relied on order of learned CIT(A). It was also pointed out that income arose to assessee because of disclaimer of benefits of Exim Policy in favour of M/s Adani Exports Ltd. Such income was not entitled to deduction under s. 10B of Act. He referred to decision of Hon ble Supreme Court in case of Escorts Ltd. vs. Union of India (1992) 108 CTR (SC) 275: (1993) 199 ITR 43 (SC), in which it was pointed out that allowance granted on scientific research assets and depreciation are basically of same nature, intended to enable assessee to write off certain items of capital expenditure against business profits. Therefore, if 100 per cent deduction has been obtained in respect of capital expenditure under s. 35, then, depreciation on same asset cannot be claimed again. case of learned Departmental Representative was that this decision lays down that assessee is not entitled to double deduction in respect of same expenditure. assessee had disclaimed export benefits in respect of certain exports made by it in favour of M/s Adani Exports Ltd. benefit received in lieu thereof cannot be claimed exempt again under s. 10B by assessee. He referred to provision contained in s. 10B(4), which provides that profits derived from export of articles or things etc., shall be amount which bears to profits of undertaking same proportion as export turnover in respect of such articles or things etc., bears to total turnover of business carried on by undertaking. This formula was similar to formula provided under s. 80HHC. If assessee disclaimed benefits in respect of exports, it was argued that there will be no export turnover and, therefore, no deduction will not be admissible under s. 10B also on basis of aforesaid formula. In rejoinder, learned counsel for assessee pointed out that learned Departmental Representative has traversed far beyond ground of appeal and even made hypothetical arguments. This amounted to re-writing order of AO and order of CIT(A). issue in case of Escorts Ltd. (supra) was whether deduction in respect of same amount was available to assessee twice under different sections of Act? This question was decided against assessee and it was held that once capital expenditure has been deducted in computing income, depreciation on capital asset will not be admissible again. However, such is not case here. assessee is not claiming any double deduction in respect of income of Rs. 15 lakhs. Further, he referred to decision of Hon ble Supreme Court in case of CIT vs. Sun Engg. Works (P) Ltd. (1992) 107 CTR (SC) 209: (1992) 198 ITR 297 (SC), in which it was inter alia pointed out that it was not desirable or permissible to pick out word or sentence from judgment of Supreme Court, divorced from context of question under consideration and treat it to be complete law declared by Court. learned Departmental Representative picked up issue of double deduction from judgment in case of Escorts Ltd. (supra), de hors facts of case or totality of judgment. This will not be permissible in view of decision in case of Sun Engg. Works (P) Ltd. (supra). He also referred to decision of Hon ble Supreme Court in case of Jain Brors. vs. Union of India (1970) 77 ITR 107 (SC) and others, in which it was pointed out that s. 271(1) and s. 297(2)(g) have to be read together. I f that is done, conclusion would be that in respect of assessments for year ended on 31st March, 1962 or any earlier year, which is completed after 1st April, 1962, imposition of penalty will be governed by s. 271(1) of Act. It was open for legislature to say that once registered firm committed default, it should be deemed to be unregistered firm for imposition of penalty. However, there was nothing to prevent legislature from giving benefit of reduced rate to registered firm for purpose of tax. On basis of this judgment, case of learned counsel was that there was nothing in s. 10B which will change character of receipt of Rs. 15 lakhs from business income to that of income from other sources. disclaimer was permitted under relevant rules and that by itself will not change nature of income or its classification. Even if there is some omission, same cannot be supplied by Courts. question in this case is whether impugned amount was business income or income from other sources? This question should be decided on basis of facts on record. We have considered facts of case and rival submissions. finding of learned CIT(A) was that receipt was incidental to main activity of business of exports undertaken by assessee. In course of business, assessee made disclaimer in favour of export house and in lieu thereof, export house gave certain commission as reimbursement of expenses. Therefore, his argument was that impugned amount was not income derived from business of export of newly established industrial undertaking, as envisaged under s. 10B of Act. question whether impugned income was business income or not was subsidiary question because even if income was business income, it had yet to be seen whether income was derived from newly established export-oriented unit. In case of Orchid Chemicals & Pharmaceuticals Ltd. (supra), interest income on margin money deposited with bank for obtaining letter of credit for import of raw material was held not to be income derived from export-oriented unit. I t was pointed out that such income was not connected with profits and gains derived from 100 per cent export-oriented undertaking. It was also pointed out that expression derived from used in s. 10B has distinct but narrower meaning and it cannot receive flexible or wider concept. assessee can claim deduction in respect of income, which is derived directly from export of goods manufactured in newly established unit. Any indirect or incidental benefits cannot be regarded as profits earned from main business activity. In coming to this conclusion, Tribunal reviewed number of cases, including one decided by Hon ble Supreme Court in case of Pandian Chemicals Ltd. vs. CIT (2003) 183 CTR (SC) 99: (2003) 262 ITR 278 (SC), in which it was pointed out that income must have direct or immediate nexus with undertaking of assessee. We have seen that assessee has disclaimed export benefits in respect of certain goods exported by it and incentive was received in lieu of disclaimer of export benefits. Thus, proximate source of receipt was disclaimer of benefits and not export activities per se. Thus, it is held that while income may be attributable to export- oriented unit, it cannot be said that same was derived from unit. Thus, ground is decided accordingly. In result, appeal of assessee is dismissed. *** TAJ INTERNATIONAL JEWELLERS v. INCOME TAX OFFICER