Commissioner of Income Tax vs Gammon India Ltd.

Dr. B.P. Saraf, J.—The following questions have been referred to us by the Tribunal at the instance of the Revenue under s. 256(1) of the IT Act, 1961 :

Asst. yr. 1974-75 :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that barges were ships and that the assessee was entitled to development rebate '' 40% thereon ?"

Asst. yr. 1975-76 :

"2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that barges were ships and that the assessee was entitled to development rebate '' 40% thereon ?

Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee is engaged in construction work and is therefore entitled to the development rebate '' 25% on its plant and machinery as against 15% allowed by the ITO ?"

The questions have been numbered by us consecutively for the sake of convenience.

So far as first two questions are concerned, the admitted position is that as back as on 2nd Nov., 1972 in assessee''s own case, the Tribunal had decided the issue in favour of the assessee by holding that the barges were ships and the assessee was entitled to development rebate at the rate of 25% thereon. This fact was brought to the notice of the ITO at the time of hearing. It was also pointed out to him that the Department''s reference applications had also been rejected in the assessee''s own case. The ITO, however, did not follow the order of the Tribunal as, according to him, the Revenue has not accepted the order of the Tribunal. It appears that before the Tribunal also at the time of hearing of application for reference it was stated by the Revenue that though the point is covered by the order of the Tribunal in the assessee''s own case in respect of earlier years, they wanted to keep the matter alive by getting the question referred to the High Court.

We asked the learned counsel for the Revenue Dr. V. Balasubramaniam to inform us as to what has happened to the decision of the Tribunal in respect of the earlier assessment years. The learned counsel asked for time which was given to him. The matter has come up again on board today. The counsel expresses his inability to make any statement in regard to the position in respect of earlier years. The order of the Tribunal in respect of the earlier years holding barges were ships was rendered as back as in the year 1972. Long 22 years have elapsed. In the instant case, the Tribunal has simply followed its earlier order in the assessee''s own case. Under the circumstances, we do not find any justifiable reason to interfere with the interpretation given by the Tribunal after long lapse of 22 years without any cogent reason. We, therefore, decline to answer questions Nos. 1 and 2.

So far as question No. 3 is concerned, it is covered by the latest decision of the Supreme Court in Commissioner of Income Tax, Orissa and Others Vs. N.C. Budharaja and Company and Others, . Following the same, we answer the above question in the negative, i.e. in favour of the Revenue and against the assessee.

This reference is disposed of accordingly.

No order as to costs.