Commissioner of Income Tax vs Poyilakada Fisheries P. Ltd.

P.K. Balasubramanyan, J.—This appeal filed by the Commissioner of Income Tax u/s 260A of the Income Tax Act, 1961, relates to the assessment year 1990-91 covered by the appeal I.T.A. No. 451 (Coch) of 1995 on the file of the Income Tax Appellate Tribunal, Cochin Bench. The appeal was admitted on the following substantial question of law :

"Whether, on the facts and in the circumstances of the case, the asses-see is entitled to investment allowance u/s 32A on the plant and machinery used in its activity of processing fish and raw cashew nuts ?"

Though served with notice the respondent has not appeared presumably because, for an earlier assessment year, the question has been answered against the assessee.

On going through the orders of the authorities and that of the Tribunal and on hearing counsel, we find that the substantial question of law formulated requires to be reframed. There was no dispute before the authorities or the Tribunal regarding the investment allowance u/s 32A of the Income Tax Act on the plant and machinery used by the assessee in its activity of processing raw cashew nuts. What was involved was a claim u/s 32A of the Act in respect of plant and machinery used in the activity of the assessee for processing fish. Therefore, we reframe the substantial question of law to be answered as :

"Whether, on the facts and in the circumstances of the case, the assessee is entitled to investment allowance u/s 32A on the plant and machinery used in its activity of processing fish ?"

It is seen that the answer to this question has already been given by a Division Bench of this court in respect of the same assessee in the decision in Commissioner of Income Tax Vs. Poyilakada Fisheries P. Ltd., . Therein, their Lordships, relying on the decision of the Supreme Court in Commissioner of Income Tax, Trivandrum Vs. Relish Goods, , have held that the assessee while processing and export of shrimps, was not entitled to the benefit of investment allowance u/s 32A in respect of computer and ice plant. It may also be noted that the Tribunal has relied on the decision in Commissioner of Income Tax Vs. Bharath Sea Foods, , rendered by a Full Bench of this court in support of its conclusion. We may notice here that the decision of the Full Bench has been reversed in appeal by the Supreme Court in Civil Appeals Nos. 3967-3971 and 3972 and 3973 of 1999 ( CIT v. Kala Cartoons P. Ltd. ). It has, therefore, to be held that the Tribunal was in error in answering the question formulated in favour of the assessee and against the Revenue.

In the light of the unreported decision of the Supreme Court (since reported in CIT v. Kala Cartoons P. Ltd. ) referred to above, the decision of the Supreme Court in Commissioner of Income Tax, Trivandrum Vs. Relish Goods, and the decision of this court in Commissioner of Income Tax Vs. Poyilakada Fisheries P. Ltd., , the substantial question of law raised in this appeal as refrained by us above, has to be answered in favour of the Revenue and against the assessee. As a result, the appeal is allowed and that part of the decision of the Tribunal is set aside. Consequential orders on the basis of this decision will be passed by the assessing authority.

The appeal is allowed as above.