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1992 Supreme(SC) 322

SUPREME COURT OF INDIA
(BEFORE M.N. VENKATACHALIAH AND P.B. SAWANT, JJ.)
(Record of Proceedings)
CIT, COCHIN ..Petitioner;
Versus
BHAGEERATHA ENGG. LTD. ..Respondent.
SLP (Civil) Nos. 5074-75 of 1992, decided on April 20, 1992
CIT v. Bhageeratha Engg. Ltd., (1992) 193 ITR 674, affirmed
Advocates appeared
S.C. Manchanda, Senior Advocate (K.P. Bhatnagar and P. Parameswaran, Advocates, with him) for the Petitioner;
Harish N. Salve, Senior Advocate (Sudhir Gopi and A.G. Prasad, Advocates, with him) for the Respondent.

Advocates:
A.G.PRASAD, HARISH N.SLAVE, K.P.Bhatnagar, P.PARMESHVARAN, S.C.Manchanda, Sudhir Gopi

The court affirmed the entitlement of the assessee to investment allowance under Section 32-A of the Income Tax Act, 1961, based on the use of machinery in an industrial undertaking for the business of construction, manufacture, or production of articles or things.

Headnote:
Investment Allowance - Income Tax Act - Entitlement of Assessee to Investment Allowance under Section 32-A
Fact of the Case:

The High Court considered the entitlement of the assessee to the investment allowance under Section 32-A of the Income Tax Act, 1961, pertaining to the use of machinery in an industrial undertaking for the business of construction, manufacture, or production of articles or things.
Finding of the Court:

The High Court found that the assessee, engaged mainly in the manufacture or processing of goods and operating as a construction company, is entitled to investment allowance under Section 32-A of the Act. The contention that the construction activity carried on by the assessee cannot be considered an industrial undertaking was deemed irrelevant.
Issues: Entitlement of the assessee to investment allowance under Section 32-A of the Income Tax Act, 1961, and the classification of the assessee as an industrial undertaking.
Ratio Decidendi: The finding that the assessee is engaged mainly in the manufacture or processing of goods and is an industrial undertaking was not challenged. Therefore, the Revenue cannot contend that the assessee company is not an industrial undertaking.
Final Decision: The special leave petition was dismissed based on the finding that the assessee is entitled to investment allowance under Section 32-A of the Income Tax Act, 1961.

ORDER

1. Heard learned counsel on both sides. The question of law formulated by the opinion of the High Court under a reference under Section 256 of the Income Tax Act, 1961, pertains to the entitlement of the assessee to the investment allowance under Section 32-A of the Act. The High Court held: "The Tribunal further found that since the machinery was used in an industrial undertaking in the business of construction, manufacture or production of articles or things, the assessee is entitled to investment allowance under Section 32-A of the Act. The finding that the assessee is engaged mainly in the manufacture or processing of goods and is an industrial undertaking is not in challenge before us. Admittedly, the assessee is a construction company and for the purpose of manufacturing activities performed by it, it used the machinery in its business of construction.

* * * *

It is not open to the Revenue to contend in this reference that the assessee company is not an industrial undertaking, since the finding of fact in that regard, entered by the Tribunal, has not been expressly challenged by an appropriate question raised in the reference."

2. The contention of the assessee (sic) in relation to the construction activity carried on by him cannot be said to be an industrial undertaking, becomes irrelevant.

3. With this finding, the special leave petition is dismissed.

Court Master

For Citation : 1994 Supp (3) SCC 477

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