Kerala H.C : Whether, on the facts and in the circumstances of the case, the assessee is entitled to investment allowance under s. 32A on the plant and machinery used in its activity of processing fish and raw cashew nuts ?

Counsel Appeared

P. K. R. Menon & George K. George, for the Appellant : None, for the Respondent

JUDGMENT

P.K. BALASUBRAMANYAN, J. :

This appeal filed by the CIT under s. 260A of the IT Act, 1961, relates to the asst. yr. 1990-91 covered by the appeal ITA No. 451 (Coch) of 1995 on the file of the 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 assessee is entitled to investment allowance under 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.

2. 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 under s. 32A of the IT Act on the plant and machinery used by the assessee in its activity of processing raw cashew nuts. What was involved was a claim under 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 under s. 32A on the plant and machinery used in its activity of processing fish?”

3. 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 CIT vs. Poyilakada Fisheries (P) Ltd. (2000) 158 CTR (Ker) 534 : (1999) 240 ITR 445 (Ker). Therein, their Lordships, relying on the decision of the Supreme Court in CIT vs. Relish Foods (1999) 152 CTR (SC) 500 : (1999) 237 ITR 59 (SC), have held that the assessee while processing and export of shrimps, was not entitled to the benefit of investment allowance under s. 32A in respect of computer and ice plant. It may also be noted that the Tribunal has relied on the decision in CIT vs. Bharath Sea Foods (1999) 152 CTR (Ker)(FB) 502 : (1999) 237 ITR 46 (Ker)(FB), 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 to 3971 and 3972 and 3973 of 1999 [reported as CIT vs. Kala Cartoons (P) Ltd. (2002) 172 CTR (SC) 125—Ed.]. 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.

4. In the light of the unreported decision of the Supreme Court (supra) referred to above, the decision of the Supreme Court in CIT vs. Relish Foods (supra) and the decision of this Court in CIT vs. Poyilakada Fisheries (P) Ltd. (supra), 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.

[Citation : 252 ITR 661]