Jammu & Kashmir H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in directing the AO to grant investment allowances on transformer ?

High Court Of Jammu & Kashmir

CIT vs. Devans Modern Breweries Ltd.

Sections 32A

Dr. B.P. Saraf, C.J. & Arun Kumar Goel, J.

IT Ref. No. 5 of 1994

27th April, 2000

Counsel Appeared

D.S. Thakur, for the Applicant : R.K. Gupta, for the Respondent

JUDGMENT

Saraf, C.J. :

By this application under s. 256(2) of the IT Act, 1961 (‘the Act’), the CIT seeks a direction to the Tribunal, Amritsar Bench, Amritsar, to refer the following three questions of law to this Court for opinion :

“I. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in directing the AO to grant investment allowances on transformer ?

Whether the Tribunal has not failed to appreciate that the transformer was used mainly in the production of alcoholic drinks which is listed in the Eleventh Schedule and its incidental use in the manufacture of ice did not earn for the assessee the deduction under s. 32A ?

Whether the Tribunal was justified in law in holding that the converse of s. 32A(2A) is true which it has held impliedly by its decisions ?”

We have heard the learned counsels for the parties. There is no dispute about the fact that the controversy in regard to grant of investment allowance under s. 32A of the Act on transformer used for the purpose of production of alcoholic drinks has already been settled by this Court in a reference in the case of the very same assessee, being ITA No. 35 of 1994 dt. 9th Aug., 1999, for an earlier assessment year. In that case, it has been held that the transformer in question having been purchased for being used for the purpose of production of alcoholic drinks, which was the main business of the assessee, the assessee was not entitled to investment allowance under s. 32A in respect thereof. The learned counsel for the parties are agreed that in view of the above decision of this Court, the question in regard to grant of investment allowance in respect of transformer in the case of the assessee stands concluded in favour of the revenue and against the assessee.

In view of the above and having regard to the fact that the controversy pertains to the asst. yr. 1983-84, we are of the opinion that no fruitful purpose will be served by calling for a statement of the case and directing the Tribunal to refer the questions of law set out above arising out of its order for our opinion. It will be in the interest of all concerned to straightaway answer the question arising out of the order of the Tribunal by dispensing with the procedural part. Accordingly, question No. 1 set out above is deemed to have been referred by the Tribunal to this Court and following the decision of this Court cited above, the same is answered in the negative, i.e., in favour of the revenue and against the assessee. As a result, the assessee would not be entitled to investment allowance on the transformer. The Tribunal erred in allowing the same. The application is disposed of accordingly.

[Citation : 256 ITR 383]

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