High Court Of Allahabad
CIT vs. Durga Bansal Cold Storage & Ice Factory
Asst. Years 1976-77, 1977-78, 1978-79
R.K. Agrawal & Vikram Nath, JJ.
IT Ref. No. 100 of 1987
27th July, 2006
Counsel Appeared :
A.K. Mahajan, for the Revenue : None, for the Assessee
By the court :
The Tribunal, Allahabad, has referred the following question of law under s. 256(1) of the IT Act, 1961 (hereinafter referred to as “the Act”), for opinion of this Court :
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled to the deduction under s. 80J on the capital employed in the two chambers added to the existing cold storage ?”
2. The reference relates to the asst. yrs. 1976-77 to 1978-79. Briefly stated the facts giving rise to the present reference are as follows : The assessee firm was running a cold storage. Amongst other things, it claimed relief under s. 80J, as a new industrial undertaking. The ITO disallowed the claim on the similar reasons as given in the asst. yrs. 1974-75 and 1975-76, namely, that the assessee did not employ 10 or more workers and that there was no separate independent viable unit which came into existence and that the new unit was formed by transfer of machinery, etc., previously used for business purposes. In short, the ITO found that the conditions have not been fulfilled for the asst. yr. 1976-77. Similar disallowance was made by the ITO in respect of other assessment years under reference.
3. The assessee took up the matter before the CIT(A) and contended that the Tribunal in the case of the assessee itself vide order for the asst. yr. 1975-76, dt. 16th May, 1981, and also for the asst. yr. 1974-75, dt. 7th Sept., 1981, held that the conditions laid down under s. 80J(4) were not applicable in the case of cold storage and it was confined to an undertaking doing manufacture or production. The CIT(A) also noted that his predecessor for the asst. yr. 1975-76 found that there was a separate independent viable unit. He noted that after the remand order, the ITO conceded that there were separate connections. The present CIT(A) agreed with the decisions for the earlier years and held that there was a separate independent viable unit for which a claim under s. 80J has been made. The CIT(A) following his earlier order as indicated above, allowed the claim of the assessee for the next two years also.
4. The Revenue took up the matter before the Tribunal contending that the CIT(A) erred in directing the ITO to allow deduction under s. 80J when the earlier orders of the Tribunal had not been accepted by the Department. The Tribunal took up all the points for disposal by its common order as the facts of the case and the background were similar. The Tribunal heard both the sides and considered the decision of the Tribunal dt. 16th May, 1981, and was of the view that the dispute was covered by its earlier decision for the asst. yr. 1974-75 being ITA Nos. 1222 and 1342/All/1980. Following that decision, the Tribunal dismissed the appeals by the Revenue on the point.
5. We have heard Sri A.K. Mahajan, learned counsel for the Revenue. No one appears on behalf of the respondent.
6. We find that under s. 80J(2) of the Act, deduction in respect of profits and gains is also available to the existing cold storage. In the present case, the Tribunal held that the assessee was entitled to the deduction under s. 80J on the two chambers added to the existing cold storage. In this view of the matter, the Tribunal was right in giving the deduction under s. 80J.
7. We, therefore, answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. However, on the question giving rise to the present reference, the parties are left to bear their own costs.
[Citation : 287 ITR 491]