Commissioner of Income Tax vs Continental Construction (P.) Ltd.

R.C. Lahoti, J.—These three References u/s 256(1) of the income tax Act, 1961 (�the Act�) at the instance of the revenue and arising out of assessment years 1973-74 to 1975-76 seek opinion of the High Court on the following three common questions of law :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee-company was an industrial company within the meaning of definition of such a company given in section 2(7)(c) of the Finance Act, 1973 and section 2(8)(c) of the Finance Act, 1975 ?

Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessee-company was entitled to the relief provided u/s 80J of the income tax Act, 1961 for any of the years namely 1973-74, 1974-75 and 1975-76.

Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that while computing the capital employed for the purposes of relief, if any, due to the assessee-company u/s 80J, the company�s liability on account of borrowed funds was required to be included in such capital, ignoring the provisions of Rule 19A of the income tax Rule, 1962 ?"

The question relating to industrial company in the light of the activities of the nature carried on by the assessee Law (sic) arose in the case of this very assessee relevant to the assessment year 1983-84 and has been adjudicated upon by the Delhi High Court in the case of Continental Construction Ltd. Vs. Commissioner of Income Tax, wherein it has been held that a company engaged in the business of construction of buildings is not to be regarded as an industrial company. Subsequently, we have two decisions of the Supreme Court laying down law on the point they are Commissioner of Income Tax, Orissa and Others Vs. N.C. Budharaja and Company and Others, and Minocha Bros. Pvt. Ltd. Vs. Commissioner of Income Tax,

Keeping in view the law laid down in the abovesaid decisions, the question Nos. 1 and 2 are answered in the negative, i.e., against the assessee and in favour of the revenue. In view of the abovesaid answers, question No. 3 is rendered academic merely and need not be answered. The references stand disposed of the above terms.