Commissioner of Income Tax vs Poyilakada Fisheries (P.) Ltd.

K.S. Paripoornan, J.—At the instance of the Revenue, the Income Tax Appellate Tribunal (in short, "the Tribunal") has referred the following question of law for the decision of this court in the above two referred cases :

"Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in upholding the order of the Commissioner of Income Tax (Appeals) who held that the entire business of the assessee was eligible for allowance u/s 80J ?"

The common respondent in the two referred cases is an assessee to Income Tax. We are concerned with the assessment years 1976-77 and 1978-79. The sole question that arises for consideration is whether the respondent assessee is eligible for the allowance u/s 80J of the income tax Act. The assessing authority negatived the relief u/s 80) of the Act. In appeal, the Commissioner of Income Tax (Appeals), following his own earlier decision, held that the assessee is entitled to relief u/s 80J of the Act. In the appeals preferred by the Revenue, the Tribunal held that an identical issue was considered in detail in the assessee''s own case for the assessment year 1977-78 by the Tribunal in I.T.A. No. 35 (Coch)/82 (order dated May 12, 1985), and, in the light of the above decision of the Tribunal, the assessee is entitled to the relief u/s 80J of the Act. It is thereafter at the instance of the Revenue that the question of law, formulated hereinabove, has been referred for the decision of this court.

We heard counsel. The earlier decision of the Tribunal rendered in I.T.A. No. 35 (Coch)/82 dated May 12, 1985, came up before this court in ITR No. 98 of 1981. The judgment in the said case was pronounced on March 16, 1987. For the year 1979-80, when an identical question came up for consideration regarding the same assessee, the Tribunal followed its earier decision in I.T.A. No. 35 (Coch)/82, order dated May 12, 1985, and gave relief to the assessee. The prayer of the Revenue to refer certain questions of law for the decision of this court was declined in view of the decision of this court in ITR No. 98 of 1981 Commissioner of Income Tax Vs. Marwell Sea Foods, ). The said earlier decision of this court regarding the same assessee for the year 1979-80 is covered by a Bench decision in O. P. No. 10279 of 1987 dated January 23, 1989.

In Commissioner of Income Tax Vs. Marwell Sea Foods, , this court held that processing of prawns amounts to production of articles and the business will be an industrial undertaking for the purpose of Section 80HH of the Income Tax Act. The same reasoning will hold good to hold that the processing of prawns will amount to production of articles and so it is an industrial undertaking for the purpose of Section 80J of the Income Tax Act. This was so held by a Bench of this court in O.P. No. 10279 of 1987. In the light of the earlier Bench decision in Commissioner of Income Tax Vs. Marwell Sea Foods, and the earlier decision in which the very same assessee was the respondent in O.P. No. 10279 of 1987, we are of the view that the Tribunal was justified in allowing relief to the respondent (assessee) u/s 80J of the Act for the entire business income of the assessee. We, therefore, answer the question of law referred to us in the affirmative, against the Revenue and in favour of the assessee. The reference is disposed of as above.

A copy of this judgment under the sent of this court and the signature of the Registrar will be forwarded to the Income Tax Appellate Tribuna, Cochin Bench.