High Court Of Madras
CIT vs. George Marjo Exports (P) Ltd.
Sections 80HHA, 80J
R. Jayasimha Babu & Mrs. A Subbulakshmy, JJ.
TC Nos. 543 & 544 of 1991
16th September, 1999
S.S. Sundaresan, for the Revenue : P.P.S. Janarthana Raja, for the Assessee
MRS. A. SUBBULAKSHMY, J. :
The following questions of law are referred to us for our opinion at the instance of the Revenue :
“1. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that the assessee is entitled to relief under s. 80J even though the assessee has not operated its cold storage plant for its own use ? and
2. Whether, on the facts and in circumstances of the case, the Tribunal is right in law in holding that the assessee is entitled for relief under s. 80HHA by holding that processing of sea foods amounts to manufacture and production of articles ?”
The first question referred to us is with regard to the relief under s. 80J of the IT Act. Sec. 80J of the Act grants deduction in respect of profits and gains from newly established industrial undertakings. Clause (iii) of sub-s. (4) of s. 80J of the Act refers to the industrial undertaking which manufactures or produces articles, or operates one or more cold storage plants, in any part of India.
Counsel for the Revenue submitted before us that in the instant case the assessee is not engaged in the manufacture of articles or production of articles in any part of India, but it had let out the machinery and derived rent and it has thus become ineligible for deduction.
The Tribunal has found that the assessee had only allowed the sister concern to avail of the use of the men and machinery on payment of charges proportionate to the goods processed. It was the assessee which operated the cold storage facility with its men and machines even though the other sister concern paid for the work done. It appears from the records that there was an agreement entered into between the assessee and its sister concern. On the basis of the agreement, the Tribunal has found that the assessee operated the cold storage with its men and machines and it was the other sister concern which paid monies for the work done. This being a question of fact, the Tribunal has considered this aspect and has found that it was the assessee which carried out the action of operating the cold storage and the production of the sea food and the entire activity was done with the men and machines of the assessee. We, therefore, do not find any error in the order passed by the Tribunal and we answer the first question in favour of the assessee and against the Revenue.
5. With regard to the second question, a similar question was considered by this Court in respect of the very same assessee for the asst. yr. 1980-81 and this Court by order dt. 29th April, 1998 in T.C. No. 1020 of 1987, CIT vs. George Maino Exports (P) Ltd., has held in favour of the Revenue and against the assessee. Following the aforesaid decision of this Court and for the reasons stated therein, we answer the second question referred to us in favour of the Revenue and against the assessee.
[Citation : 250 ITR 446]