Delhi H.C: Whether, on the facts and in the circumstances of the case, the assessee is entitled to : (i) investment allowance under s. 32A(2)(b)(iii); and (ii) relief under s. 80J of the IT Act, 1961 ?

High Court Of Delhi

CIT vs. Megaska International (India) (P)Ltd.

Sections 32A, 80J

Asst. Year 1978-79

Arijit Pasayat, C.J. & D.K. Jain, J.

IT Ref. No. 12 of 1983

6th August, 2001

Counsel Appeared

Ajay Jha, for the Applicant : None, for the Respondent

JUDGMENT

ARIJIT PASAYAT, C.J.:

At the instance of the Revenue, the following question has been referred for opinion of this Court under s. 256(1) of the IT Act, 1961 (in short ‘the Act’), by the Tribunal, Delhi Bench ‘A’: “Whether, on the facts and in the circumstances of the case, the assessee is entitled to : (i) investment allowance under s. 32A(2)(b)(iii); and (ii) relief under s. 80J of the IT Act, 1961 ?” The dispute relates to the asst. yr. 1978-79.

2. Factual position in a nutshell, as is indicated in the statement of the case, is as follows : Assessee 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 30th Sept., 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 under s. 32A(2)(b)(iii) on the ground that it was a small-scale industrial undertaking. It also claimed deduction under s. 80J on the basis that it was an industrial undertaking and that profits and gains derived from the activity of building constructions were profits derived from the industrial undertaking. The ITO held that assessee was not an industrial undertaking and, therefore, the claim for investment allowance and benefit under s. 80J were denied. Matter was carried in appeal before the Commissioner of Income-tax (Appeals) [in short ‘CIT(A)’]. The assessee’s claim was accepted by the CIT(A) 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 Corpn. Ltd. vs. CWT (1969) 74 ITR 465 (Del) : TC 67R.653, the claims were allowable. On being moved for reference, question as set out above, has been referred for opinion of this Court.

3. We have heard the learned counsel for the Revenue. There is no appearance on behalf of the assessee. So far as the first part of the question is concerned, in view of the decision of the apex Court in CIT vs. N.C. Budharaja & Co. & Anr. (1993) 114 CTR (SC) 420 : (1993) 204 ITR 412 (SC) : TC 25R.185, the answer is in the negative, in favour of the Revenue and against the assessee. Consequentially, so far as the second part of the question is concerned, the assessee is not entitled to any relief under s. 80J of the Act. That part of the question is also answered in the negative, in favour of the Revenue and against the assessee.

Reference is accordingly disposed of.

[Citation : 254 ITR 283]

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