D. K. Jain,j. ( 1 ) IN this reference under Section 256 (1) of the Income-tax Act, 1961 (in short the Act), at the instance of the revenue, the following two questions have been referred for the opinion of this Court:- "1. WHETHER, on the facts and in the circumstances of the case, the Tribunawas justified in allowing assessee s claim for deduction u/s 80hh for its unit M /s Rockfort Asbestos despite the fact that this unit was leased out to M/s Hari Bros. (P) Ltd. , and the assessee company did not derive any profit from manufacturing operations. 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing assessee s claim u/s 80j for its unit M/s Rockfort Asbestos and directing the Income-tax Officer to determine the relief as per the rules, on the ground that having held that the assessee is entitled to deduction u/s80hh, theassessee is also entitled to deduction u/s 80j ?" ( 2 ) AT the outset we may state that the first question, as framed, can straight away be answered in the negative on the short ground that the question itself suggests and holds that "the assessee company did not derive any profit from manufacturing operations", which is a condition precedent for the deduction permissible under Section 80hh of the Act. Relief under Section 80j of the Act having been granted in consequence of the relief under Section 80hh. and also stated so in the question itself. the answer to second question will also go the same way. However, as the case has been argued at some length, we will also consider it so. for which it would be necessary to refer to tlie cts as found by the Tribunal and the relevant statutory provisions. ( 3 ) THE respondent/assessee, a closely held company was engaged in various trading and manufacturing activities. On I April 1971 tlie assessee set up a new industrial undertaking at Dalmia Puram, a notified backward area situated in Tiruchirapalli District of Tamil Nadu under the name and style of Rockfort Asbestos for manufacturing asbestos cement pipes. For the assessment year 1975-76, with which we are concerned in the present reference and for which the accounting period ended on 31 October 1974, the assessee claimed deduction under Section 80hh of the Act, amounting to Rs. 3,646. For the assessment year 1975-76, with which we are concerned in the present reference and for which the accounting period ended on 31 October 1974, the assessee claimed deduction under Section 80hh of the Act, amounting to Rs. 3,646. 00 , being 20% of the profits derived from its unit Rockfort Asbestos. In respect of the same unit it also claimed deduction under Section 80j of the Act atrs. 9. 834. 00. ( 4 ) WHILE examining the said claim during the course of assessment proceedings for the relevant assessment year, the Income-tax Officer noticed that instead of carrying out the manufacturing activity itself in the said new unit, the assessee had leased out the entire industrial undertaking to M/s Hari Bros (P) Ltd on 10 April 1973 at an annual rent of Rs. 38,000. 00 and after deducting the depreciation in respect of the unit, amounting to Rs. 19,796. 00. a net profit of Rs. 18. 231. 00 was declared from this unit and accordingly relief under Section 80hh of theactwasworked out at Rs. 3. 646. 00. The Income-tax Officer was of the view that since the assessee did not carry out any manufacturing activity itself, it was not entitled to any relief under Section 80hh of the Act. The assessee s claim in this behalf was accordingly rejected. Since conditions precedent for allowance of relief under Section 80j and 80hh of the Act are more or less similar, assessee s claim under Section 80j Income-tax (Appeals) the assessee carried the matter in second appeal before the Tribun. Before the Tribunal it was contended on behalf of the assessee that the profit of the business by way of lease money was derived from tlie new industrial undertaking and, therefore, the assessee was entitled to the claim of deduction under Section 80hh of the Act. It was submitted that to avail of relief under the said Section it was not necessary that the manufacturing activity must becarried out by the assessee itself. The. It was submitted that to avail of relief under the said Section it was not necessary that the manufacturing activity must becarried out by the assessee itself. The. Tribunal found merit in assessee s view point and held that the leasing out of the commercial assets of new industrial unit at Dalmia Puram constituted a business activity on the part of the assessee and since the Income-tax Officer had assessed the lease rent in the hands of the assessee as business profit, the said income from lease rent could clearly be said to be profit derived from the industrial unit within the meaning of Section 80hh of the Act. In coming to this conclusion the Tribunal drew support from a judgment of the Madras High Court in CIT v. Universal Radiators P. Ltd. (1981) 128 ITR 531. Since relief under Section 80j of the Act had been denied to the assessee by the lower authorities mainly on the ground of disallowance of relief under Section 80hh of the Act, the Tribunal further directed that relief under Section 80j should also be allowed to the assessee as per the Rules. It is the correctness of this conclusion of she Tribunal which is challenged before us by the revenue by asking for a reference on the question mentioned above. ( 5 ) THE answer to the questions raised in main depends on the provisions and interpretation of Section 80hh of the Act, which governs the controversy in the first question. The query in the second question relates to claim for relief under Section 80j of the Act, allowed by the Tribunal in consequence of relief grant under Section 80hh. The controversy, therefore, revolves round Section 80hh of the Act. The material portion of Section 80hh of the Act, with which we are concerned, as it stood at the relevant time, reads thus: "80hh - (1)Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking, or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, incomputing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent thereof. " (2) This section applies to any industrial undertaking which fulfils all the following conditions, namely :- (i) it has begun or begins to manufacture or produce articles after the 31st day of December, 1970 in any backward area: (ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence in any backward area: Provided that this condition shall not apply in respect of any industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in section 33b, in the circumstances and within the period specified in that section; (iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose in any backward area: (iv) it employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power, Explanation: Where any machinery or plant or any part thereof previously used for any purpose in any backward area is transferred to a new business in that area or in any other backward area and the total value of the machinery or plant or part so transferred does not exceed twenty per cent of the total value of the machinery or plant used in the business, then, for the purposes of clause (iii) of this sub-section, the condition specified therein shall he deemed to have been fulfilled. ( 6 ) THE Section, introduced by the Direct Taxes (Amendment) Act 1974, w. e. f. I April 1974, with a view to allowing deductions to newly established industrial undertakings and hotel business in certain specified backward areas, provides that where the gross total income of the assessee includes any profits and gains derived from an industrial undertaking, it shall be allowed a deduction from such profits and gains of an amount equal to 20% thereof provided the assessee satisfies the requirements prescribed therein. Besides fulfilling the conditions stipulated in sub-section (2) of Section 80hh of the Act, the assessee has also to establish that his profits and gains are derived from his industrial undertaking. Besides fulfilling the conditions stipulated in sub-section (2) of Section 80hh of the Act, the assessee has also to establish that his profits and gains are derived from his industrial undertaking. ( 7 ) IN the instant case it is not in dispute that assessee s new unit Rockfort Asbestos, in respect whereof relief is claimed under Section 80hh. is an industrial undertaking within the meaning of the said Section and it fulfils all the conditions laid down in in sab-section (2) thereof. The only objection of the revenue in the grant of the relief under the said Section is that the industrial undertaking having been leased out by the assessee the lease income earned by the assessee does not constitute profits and gains derived from an industrial undertaking. In other words the question which falls for consideration is whether the income earned by the leasing out of the entire industrial undertaking could be said to be profits and gains derived from the industrial undertaking of the assessee" The answer to the question posed before us thus turns on the scope and meaning of the expression "derived from" used in Section 80hh of the Act. Lease income to the assessee ilia wider sense could perhaps be attributable to the industrial undertaking but the question would be does it directly emerge from its running to make it a profit and gain arising from the industrial unit. The answer to the question would this depend on whether the expression in the section "profits and gains derived from industrial undertaking" admits of a restricted or a liberal construction. ( 8 ) WHILE deriving support from the decision of the Privy Council in Commr. of income Tax v. Raja Bahadur Kumakhaya Narayan Singh, (1948) 16 ITR 325 and of the Supreme Court in Camhoy Elearic Supply Industrial Co. , v. C. I. T. , (1978) 113 ITR 84. wherein the word "derived" has received judicial interpretation. Mr. Rajendra. learned Standing Counsel for the revenue has vehemently contended that the said word has to he given a very restricted meaning. His submission is that the expression "any profits and gains derived from an industrial undertaking" means that the industrial undertaking must itself be the direct source of the profits or gains and implicit in it is the condition that the assessee must carry on the industrial activity by itself. His submission is that the expression "any profits and gains derived from an industrial undertaking" means that the industrial undertaking must itself be the direct source of the profits or gains and implicit in it is the condition that the assessee must carry on the industrial activity by itself. His stand is that in the present case the industrial undertaking having been leased out to M/s Hari Bros (P) Ltd. the direct source of profit to the assessee is the lease and not the industrial undertaking and, therefore, it cannot be said that the assessee has derived any profit and gains from an industrial undertaking. He has placed reliance on Hindustan lever Ltd v. Commissioner of Income Tex, (1980)121 ITR 951 (Born), CIT v. Cochin Refineries Ltd. , (1982) 135 ITR 278 (Ker), CIT v. Cochin Refineroes Ltd. . (1983)142 ITR 441 (Ker) and Sterling Foods v. CIT. (1984)150 ITR 292 (Kar ). ( 9 ) ON the other hand, Mr. Harihar Lal. learned counsel for the assessee, inseeking to support the view of the Tribunal, vehemently argued that the wording of Section 80hh does not postulate any condition that the industrial undertaking must be run by the assessee itself. While inviting our attention to some other sections viz. . Section 33 (1) and 80p (2) of the Act he was at pains to explain that whenever the legislative intent was that to avail of a particular rehate or deduction, the assessee must carry on or engage himself in that particular activity, it had been specifically provided therein. He submitted that the decisions relied on by the Revenue were distinguishable inasmuch as unlike those cases, in the present case, the direct source of income was the industrial undertaking and the lease was only a mode of safeguarding the rights of the parties. He also said that the industrial undertaking was leased out by the assessee to M/s Hari Bros (P) Ltd lock, stock and barrel and was run by them on the same lines as was being done by the assessee itself. The statement is objected to by learned counsel for the Revenue on the ground that it does not emerge either from the statement of the case or from the annexures forming part thereof. Reference was made by Mr. Harihar Lal to a decision of the Supreme Court in Mrs. Bacha F. Gwkirv. The statement is objected to by learned counsel for the Revenue on the ground that it does not emerge either from the statement of the case or from the annexures forming part thereof. Reference was made by Mr. Harihar Lal to a decision of the Supreme Court in Mrs. Bacha F. Gwkirv. C. I. T. , (1955)27 ITR 1. ( 10 ) SINCE the word "derived" has alredy received judicial interpretation, we do not consider it necessary to go into its dictionery meaning but it will be useful to refer at this stage to the decisions wherein its scope has been considered. ( 11 ) IN Raja Bahadur Kamakhaya Narayan Singh s case (supra) the Privy Council was considering whether the interest on arrears of rent payable in respect of land use for agricultural purpose was agricultural income within the definition of the phrase contained in Section 2 (1) of the Indian Income-lax Act, 1922 and was, therefore, exempt from Income-tax? It was held that the said interest on rent of agricultural land was not an agricultural income as it was neither rent nor revenue derived from land within the meaning of the said Section. In reaching that conclusion the Privy Council observed thus:- "the word "derived" is not a term of art. Its use in the definition indeed demands an enquiry into the genealogy of the product. But tlie enquiry should stop as soon as the effective source is discovered. In the genealogical tree of the interest land indeed appears in the second degree, hut the immediate and effective source is rent, which has suffered the accident of non-payment. And rent is not land within the meaning of the definition. " ( 12 ) FROM the above passage it is evident that a restricted meaning was assigned to the word "derived" by the Privy Council. In its view, if an enquiry was to be made as to the genealogy of the item under consideration, the enquiry should stop as soon as the effective source is discovered. ( 13 ) SIMILAR view was expressed by the Supreme Court in Cambey Electric Supply Co. (supra) while examining the scope of Section 80e, as it stood at the relevant time. ( 13 ) SIMILAR view was expressed by the Supreme Court in Cambey Electric Supply Co. (supra) while examining the scope of Section 80e, as it stood at the relevant time. In the said decision the Supreme Court explained the distinction between the expression "attributable to" and the expression "derived from" and observed that the former expression is wider in import thanthe latter expression. ( 14 ) IN Sterling Foods (supra), the Karnataka High Court had the occasion to consider the provisions contained in Section 80hh of the Act. though in a different context. Following the ratio of the aforesaid two decisions, the Karnataka High Court held that the expression "derived from" has a definite but narrow meaning and it cannot receive a flexible or wider concept. The Court went on to observe that to claim relief undersection 80hh of the Act, the assessee must establish that his profits and gains were derived from his industrial undertaking and it was not just sufficient if a commercial connection is established between the profits earned and the industrial undertaking. The Court held that the law requires that such protits must have been derived from the industrial undertaking, which must itself be the source of that profit. ( 15 ) THUS, the word "derived" has to be assigned a restricted meaning as compared to the words "attributable to" or "referable to" and, therefore, to avail of a rebate under Section 80hh, anassessee must establish that he has derived profits or gains from the industrial undertaking. In other words the industrial undertaking must itself be the source of that profit and gain and it is not sufficient if a commercial connection is established between the profits and gains earned and the industrial undertaking. ( 16 ) AS we have noted above, the assessee established a new industrial undertaking on I April 1971 in a backward area and fulfilled all the conditions specified in the Section and became entitled to claim rebate under the said Section. It ran the industrial undertaking itself upto 9 April 1973 whereafter it was leased out to Hari Bros (P)Ltd. Therefore, for the period from I April 1971 to 9 April 1973. there could be little doubt that the assessee qualified for rebate under Section 80hh. It ran the industrial undertaking itself upto 9 April 1973 whereafter it was leased out to Hari Bros (P)Ltd. Therefore, for the period from I April 1971 to 9 April 1973. there could be little doubt that the assessee qualified for rebate under Section 80hh. However, the intervening factor, which, as per the stand of the revenue, disentitled the assessee from claiming the rebate with effect from 10 April 1973 is the leasing out of the industrial undertaking by the assessee for a fixed sum. on which amount the assessee claimed rebate under the said Section. ( 17 ) THE cardinal rule of interpretation is that the statute must beconstrued according to its plain language and neither should anything be added nor subtracted therefrom unless there are adequate grounds to justify the inference that the legislature clearly so indicated. It is also well settled that in a taxing statute one has to look merely at what is clearly stated. The meaning and extent of the statute must be collected from the plain and unambiguous expression used therein, rather than from any notions which may be entertained by the Court as to what is just or expedient. ( 18 ) GOING by the language of Section 80hh of the Act, the short question for consideration is whether the lease money received by the assessee could he said to be "profits and gains derived from industrial undertaking". As noticed above, the meaning of the term "derived" has been construed by the privy Council in Raja Bahadur Kamakhya Narayan singh s case and by the Supreme Court in Cambey Electric Supply Industrial Company (supra), Followed On in Sterling Foods by the Karnataka High Court to have a definite, narrow and restricted meaning. It cannot receive flexible or wider connotation. the source of particular income by an assessee on which a rebate is sought for must directly emerge from the running of the industrial undertaking, yielding profits and gains. Rebate is not allowable if the particular income is merely attributable or relatable to an industrial undertaking. Lease of an immoveable property (including plant and machinery embedded in the soil) is a transfer of a right to enjoy such property, in considerration of a price paid or promised, or of money. Rebate is not allowable if the particular income is merely attributable or relatable to an industrial undertaking. Lease of an immoveable property (including plant and machinery embedded in the soil) is a transfer of a right to enjoy such property, in considerration of a price paid or promised, or of money. Lease money for such transfer, having no direct nexus with the profits or gains from the property transferred tor use, cannot, therefore, be said to be "profits and gains derived from industrial undertaking" within the meaning of Section 80hh ofthe Act. It is entirely of a different character and species from profits and gains derived from running of an industrial undertaking. Fixed lease money as herein is not dependent becomes payable irrespective of any profit or gain or for that matter from the running of an industrial undertaking by the lessee. The lessee may or may not run the unit (industrial undertaking) or may or may not earn any profit or gain and infact may incur loss in running, he still will he liable to pay lease money. Thus income from lease money earned herein, though in a wider sense attributable to the industrial undertaking (as it is for leasing out the unit) cannot be said to be profits or gains (or a mode safeguarding it) derived from the industrial undertaking so as to entitle the lessor-assessee to a rebate under Section 80hh of the Act. In this view of the matter it is not necessary for us to further go into the contentions urged by the learned counsel for the assessee. ( 19 ) IN our opinion, therefore, the Tribunal fell into error in holding that the assessee was entitled to deduction under Section 80hh of the Act on the fixed lease money received by it for the instrial undertaking. ( 20 ) AS regards question No. 2, we find from the statement of the case that assessee s claim for deduction under Section 80j of the Act has been allowed by the Tribunal on the ground that since the assessee is entitled to relief under Section 80hh of the Act, it has to be allowed deduction under Section 80j also. As we have held that the assessee is not entitled to deduction under Section 80hh in respect of its unit Rockfort Asbestos, on the same analogy it cannot be granted relief under Section 8qj of the Act. As we have held that the assessee is not entitled to deduction under Section 80hh in respect of its unit Rockfort Asbestos, on the same analogy it cannot be granted relief under Section 8qj of the Act. ( 21 ) FOR the reasons recorded above, we answer both the questions in the negative, in favour of the revenue and against the assessee. ( 22 ) THE revenue will be entitled to costs, which we assess at Rs. 2,000. 00.