Ceekay Associates (P) Ltd. vs Commissioner of Income Tax, Lucknow

The Income Tax Appellate Tribunal, Allahabad, has referred the following two questions of law u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) for opinion to this Court:

At the instance of the assessee :

"Whether on the facts, circumstances and legal position of the case, the Appellate Tribunal is justified in law in holding that the assessee-company is not an ''industrial company''?"

At the instance of the revenue:

Whether, on the facts and in the circumstances of the case, the Tribunal was in law, justified in holding that the assessee was an industrial undertaking ?"

Briefly stated the facts giving rise to the present reference are as follows:

The reference relates to the assessment year 1983-84.

The applicant is a private limited company and is engaged in the construction activities. It undertakes running contracts for construction of building. For the assessment year in question, the applicant claimed that it is industrial undertaking and, therefore, entitled for investment allowance u/s 32A of the Act and deduction under sections 80HH and 80J of the Act. Investment allowance and deductions were not allowed by the assessing authority on the ground that it is not an industrial undertaking and is not engaged in the business of manufacture or production of any article or things. Feeling aggrieved the applicant preferred appeal before the Appellate Assistant Commissioner who accepted the contention of the applicant and had held that it is industrial undertaking and entitled for investment allowance as well as deduction under sections 80HH and 80J of the Act. Feeling aggrieved the revenue preferred appeal before the Tribunal. The Tribunal has held that it is an industrial undertaking and entitled to deduction under sections 80HH and 80J of the Act as also investment allowance u/s 32A of the Act. However, for computation of the exact amount the matter has been remanded.

We have heard the learned counsel for the parties. In view of the decision of the Apex Court in the case of Commissioner of Income Tax, Orissa and Others Vs. N.C. Budharaja and Company and Others, the applicant who is engaged in civil construction work cannot be said to be an industrial undertaking and, therefore, not entitled for investment allowance and deductions under sections 80HH and 80J of the Act.

In this view of the matter we answer both the questions referred to us in the negative, i.e., in favour of revenue and against the assessee. There shall be no order as to costs.