Commissioner of Income Tax vs megaska international (india) (p) ltd.

Arijit Pasayat, C.J.

At the instance of the revenue, the following question has been referred for opinion of this court u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) by the Tribunal, Delhi Bench ''A'' :

"Whether, on the facts and in the circumstances of the case, the assessed is entitled to

(i) investment allowance u/s 32A(2)(b)(iii); and

(ii) relief u/s 80J of the Income Tax Act, 1961 ?''

The dispute relates to the assessment year 1978-79.

Factual position in a nutshell, as is indicated in the statement of the case, is as follows:

assessed is a private limited company and was, at the relevant point of time, engaged in the business as a building contractor. Its accounting period ended on 30-9-1977. It undertook a sub-contract from Engineering Projects (India) Ltd., New Delhi, a Government of India undertaking, for the construction of 350 dwelling units at Ardiya (Helder) Housing Project, Kuwait. It claimed investment allowance on building and machinery purchased during the year u/s 32A(2)(b)(iii) of the Act on the ground that it was a small-scale industrial undertaking. It also claimed deduction u/s 80J of the Act on the basis that it was an industrial undertaking and that profits and gains derived from the activity of building constructions where profits derived from the industrial undertaking. The Income Tax Officer held that assessed was not an industrial undertaking and, Therefore, the claim for investment allowance and benefit u/s 80J were denied. Matter was carried in appeal before the Commissioner (Appeals). The assessed''s claim was accepted by the Commissioner (Appeals) holding that it is an industrial undertaking. The revenue preferred an appeal before the Tribunal, which held that in view of the decision of this court in National Projects Construction Corporation Ltd. Vs. Commissioner of Wealth Tax, , the claims were allowable. On being moved for reference, question as set out above, has been referred for opinion of this court.

We have heard the learned counsel for the revenue. There is no appearance on behalf of the assessed.

So far as the first part of the question is concerned, in view of the decision of the Apex Court in Commissioner of Income Tax, Orissa and Others Vs. N.C. Budharaja and Company and Others, the answer is in the negative, in favor of the revenue and against the assessed. Consequentially, so far as the second part of the question is concerned, the assessed is not entitled to any relief u/s 80J. That part of the question is also answered in the negative, in favor of the revenue and against the assessed. Reference is, accordingly, disposed of.