2006 Supreme(SC) 1302

2007(2) Supreme 624
SUPREME COURT OF INDIA
(From Punjab and Haryana High Court)
S.B. Sinha and Markandey Katju, JJ.
S.A. Builders Ltd.—Appellant
versus
Commissioner of Income Tax (Appeals) Chandigarh & Anr.—Respondents
Civil Appeal No. 5810 of 2006
(Arising out of SLP (Civil) Nos. 1297-98 of 2005)
Decided on 14-12-2006
Counsel for the Parties :
For the Appellant : Nidhesh Gupta, Vinod Shukla, Deepak Goel and Ms. S. Janani, Advocates.
For the Respondents : Ravindra Srivastava, Sr. Advocate, Ranvir Chandra, Ms. Shilpa Singh and B.V. Balaram Das, Advocates.

IMPORTANT POINT
Deduction under Section 32AB Income Tax Act is not automatic and is subject to various conditions which require examination into facts.

Headnote:Income Tax Act, 1961—Section 32AB—Claim for deduction under—Appellant engaged in civil construction claimed deduction as additional ground before Income Tax Appellate Tribunal—Tribunal rejected claim on ground that business in civil construction did not amount to manufacturing activity and that claim was not based on facts on record—High Court agreed with the view—Appeal—Deduction u/s 32 AB of the Act was not automatic and was subject to various conditions which required examination of facts—Assessee-appellant was rightly held not entitled to deduction claimed.

       Held : Tribunal has rejected the claim of the assessee on two grounds. The first ground is that the assessee was engaged in the business of civil construction and was not carrying on any manufacturing activity. Hence, the claim was not allowable in view of the judgment of this Court in CIT vs. N.C. Budharaja & Co. (1993) 204 ITR 412. The second ground for rejecting the claim was that the claim was not based on facts on record. The deduction under Section 32AB was not automatic and was subject to various conditions laid down in that provision. Whether the assessee fulfilled those conditions for claiming the deduction or not required examination into facts which were not on record. Even before the Tribunal the assessee had not placed any material to show how the assessee is entitled to such deduction. Hence the Tribunal rejected the assessees claim. By the impugned judgment the High Court has agreed with the view of the Tribunal. We have also carefully considered the matter and we are fully in agreement with the Tribunal as well as the High Court. For both the reasons mentioned by the Tribunal in paragraphs 19-21 of its order, we are of the opinion that the assessee was not entitled to the deduction claimed by it. (Paras 4 to 6)