Chief Commissioner (Admn.) vs Rohelkhand Foods (P) Ltd.

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

Whether in law and on the facts of the case, the order of the Commissioner (Appeals) relating to investment allowance u/s 32A of the Income Tax Act, 1961 which has been upheld by the Tribunal is correct in law?

The present reference relates to the assessment year 1980-81.

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

The respondent is a private limited company. It is engaged in the business of processing of Mentha oil. Farmers and agriculturists enter at the business premises of the respondent-assessee along with Menthaherbs which is distilled at the plant of the respondent and oil is taken out. The respondent receives charges for the job. In the year in question, the Income Tax Officer disallowed the claim of the investment allowance amounting to Rs. 18,777 u/s 32A of the Act. Feeling aggrieved the respondent preferred an appeal before the Commissioner of Income Tax (Appeals) who has allowed the claim of the investment allowance if necessary reserve has been created by the respondent which order has been upheld by the Tribunal.

We have heard Sri Shambhoo Chopra, learned standing counsel appearing for the revenue and nobody has appeared on behalf of the respondent-assessee.

We find that in the case of Commissioner of Income Tax Vs. Forbes Ewart and Figgis P. Ltd., , the Kerala High Court has held that investment allowance u/s 32A of the Act is admissible for the works carried out on job work basis.

Respectfully following the aforesaid decision, we answer the question referred to us in the affirmative, ie., in favour of the assessee and against the revenue. However, there shall be no order as to costs.