Supreme Court Of India
CIT vs. Kala Cartoons (P) Ltd.
Section 1981FA 2(7)(c)
Asst. Year 1980-81, 1981-82, 1982-83, 1983-84, 1984-85
Y.K. Sabharwal & Brijesh Kumar, JJ.
Civil Appeal Nos. 3967 to 3971 of 1999; 3972 & 3973 of 1999; 4500 & 4501 of 2001 & SLP Nos. 18397 & 18398 of 1999
24th July, 2001
Ranbir Chandra, S.K. Dwivedi & Ms. Sushma Suri, for the Appellant : M.P. Vinod, for the Respondent
BY THE COURT :
C. A. Nos. 3967-71 of 1999 : At the instance of the Revenue, the following questions relating to the asst. yrs. 1980-81 to 1984-85 were referred for the opinion of the High Court under s. 256(2) of the IT Act, 1961 :
“(1) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding that the assessee is an industrial company eligible to be taxed only at the rate of 55 per rent. ?
(1)(a) Whether processing of marine products for export would make the assessee an industrial company ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in holding that it cannot be said that the issue involved herein is a debatable issue and on that basis there was no mistake on the face of the record and are not the findings wrong, unreasonable and illogical ?”
The High Court by the judgment and order under appeal answered questions Nos. 1 and l(a) in the affirmative, that is, in favour of the assessee and against the Revenue. The second question was returned unanswered.
In these appeals, we are not concerned with the second question and in relation thereto, learned counsel for the Revenue did not make any submission. The Tribunal, while answering the aforesaid questions in favour of the assessee, has relied upon the decisions of the Kerala High Court in CIT vs. Marwell Sea Foods (1987) 166 ITR 624 (Ker) : TC 25R.200 and CIT vs. Relish Foods (1989) 78 CTR (Ker) 197 : (1989) 180 ITR 454 (Ker) : TC 25R.1008.
The case of the assessee for claiming allowance under s. 80HH is that it is an industrial undertaking that manufactures/produces articles. The Tribunal has held that the activities of the assessee involve purchasing, peeling, freezing and export of shrimps. The said activities to be amounting to production. Apart from the above activities, there is no description of what the assessee does to the shrimps after buying except peeling and freezing and thereafter exporting.
The decision of the High Court in the case of Relish Foods (supra), has been set aside by this Court in the case of CIT vs. Relish Foods (1999) 152 CTR (SC) 500 : (1999) 237 ITR 59 (SC). In respect of Marwell Sea Foodâs case (supra), it was noticed by this Court that the assessee therein had placed before the taxing authorities a detailed description of the process by which prawns were prepared for export and the appellate authorities had understood the various stages through which the prawns passed as processes involving production or manufacture. Here nothing of the kind was placed by the assessee before the taxing authorities. The present case is squarely covered by the decision in the case of Relish Foods (supra).
For the aforesaid reasons, we answer the aforesaid questions in the negative, that is, in favour of the Revenue and against the assessee.
The appeals are allowed accordingly, leaving the parties to bear their own costs. C.A. Nos. 3972-73 of 1999 and S. L P. (C) Nos. 18397 & 18398 of 1999 : Leave granted in S. L. P. (C) Nos. 18397 & 18398 of 1999. In view of the order just made in C.A. Nos. 3967-71 of 1999, these appeals are allowed, leaving the parties to bear their own costs.
[Citation : 252 ITR 658]