High Court Of Punjab & Haryana
Liberty Group Marketing Division vs. CIT
Section 256(2)
Asst. Year 1987-88
M.M. Kumar & Ajay Kumar Mittal, JJ.
IT Case No. 33 of 1999
19th July, 2007
Counsel Appeared :
Sanjay Bansal with Parvesh Saini, for the Petitioner : Sanjiv Bansal, for the Respondent
JUDGMENT
M.M. Kumar, J. :
This order shall dispose of IT Case Nos. 33 and 34 of 1999. The prayer made by the assessee in both the petitions filed under s. 256(2) of the IT Act, 1961 (for brevity, “the Act”), is for issuance of direction to the Tribunal, Delhi Bench, New Delhi (for brevity, “the Tribunal”), to frame the statement of the case and refer question of law which is claimed to have emerged from the orders dt. 18th Feb., 1998, passed in ITA No. 7147/Del/1990, in respect of the asst. yr. 1986-87 and ITA No. 7148/Del/1990, in respect of the asst. yr. 1987-88. The following question of law has been claimed :
“Whether, on the facts and circumstances of the assessee’s case, the Tribunal has erred in law while not accepting claim under s. 80-I although the assessee fulfilled all requisite conditions of being an industrial undertaking ?”
The assessee is a registered partnership firm and made an application to the Tribunal under s. 256(1) of the Act claiming the aforementioned question of law for reference to this Court with the pleadings that the aforementioned question emerges out of the orders referred above. A perusal of the record shows that the Asstt. CIT framed the assessment but did not allow the claim of the assessee under s. 80-I of the Act on the ground that the assessee cannot be regarded as an industrial undertaking, which may be covered by the necessary conditions envisaged by s. 80-I of the Act. It is appropriate to mention that the assessee is engaged in the business of manufacture and sale of shoes and in para 6 of the order of the Tribunal there are findings with regard to the role of the assessee in the manufacturing of shoes. The Tribunal has also observed that the shoes were got manufactured wholly from the cobblers on piece rate basis who were not employees of the assessee. Mr. Sanjay Bansal, learned senior counsel has argued that the Tribunal has placed reliance on two judgments of the Madras High Court in the cases of CWT vs. S. Venkatachalam Pillai (1995) 129 CTR (Mad) 374 : (1995) 215 ITR 406 (Mad) and CWT vs. V. O. Ramalingam (1995) 216 ITR 566 (Mad). The aforementioned judgments represent the view that an assessee who gets manufactured its goods from an outside agency would not be regarded as an industrial undertaking within the meaning of s. 80-I of the Act and, therefore, would not qualify to claim deduction. According to learned counsel, a contrary view has been expressed by other High Courts, which is in favour of the assessee, namely, CIT vs. Penwalt India Ltd. (1991) 96 CTR (Bom) 20 : (1992) 196 ITR 813 (Bom); CIT vs. Talwar Khuller (P) Ltd. (1998) 149 CTR (All) 117 : (1999) 235 ITR 70 (All); CIT vs. Prabhudas Kishordas Tobacco Products (P) Ltd. (2006) 201 CTR (Guj) 312 : (2006) 282 ITR 568 (Guj); CIT vs. Taj Fire Works Industries (2006) 204 CTR (Mad) 108 : (2007) 288 ITR 92 (Mad) and CIT vs. Prithviraj Bhoorchand (2006) 200 CTR (Guj) 82 : (2006) 280 ITR 94 (Guj). He has further submitted that there is no judgment of either the Hon’ble Supreme Court or this Court which is jurisdictional High Court on the aforementioned question of law. Mr. Sanjiv Bansal, learned counsel appearing for the Revenue could not controvert that there is a conflict of the opinion between the various High Courts, as has been submitted by learned counsel for the assessee. He has also not been able to dispute that on the subject there is no view expressed by the Hon’ble Supreme Court or this Court which is jurisdictional High Court. However, he has pointed out that the view contrary to the Madras High Court, taken by the other High Courts, has been expressed after the Tribunal has declined the application of the assessee filed under s. 256(1) of the Act.
We have thoughtfully considered the submissions made by learned counsel for the parties and are of the view that the question sought by the assessee deserves to be determined by this Court, especially when there is no view expressed either by the Hon’ble Supreme Court or by this Court which is jurisdictional High Court. In view of the above, these petitions are allowed. The Tribunal is directed to draw a statement of the case and refer the abovenoted question of law along with the statement of the case to this Court.
[Citation : 294 ITR 61]
