1998 PLP 1313 (PTD)
COMMISSIONER OF INCOME-TAX Versus Sri RANGANATHAR & CO.
| Citation | 1998 PLP 1313 (PTD) |
| Forum / Court | 224 I T R 75 |
| Bench Members | Thanikkachalam and Balsubramaniam, JJ |
| Parties | COMMISSIONER OF INCOME-TAX Versus Sri RANGANATHAR & CO. |
| Primary Law | Income-tax |
Q1: What are the key laws and sections cited in 1998 PLP 1313 (PTD)?
This judgment primarily cites: Income-tax as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 1998 PLP 1313 (PTD)?
The case was heard and decided by the 224 I T R 75 bench comprising: Thanikkachalam and Balsubramaniam, JJ.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 1998 PLP 1313 (PTD) (COMMISSIONER OF INCOME-TAX Versus Sri RANGANATHAR & CO.). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Representation
- The point for consideration is, whether the assessee, which is engaged in the business of executing civil contract works in entitled to investment allowance under section 32-A(2) of the Income-tax Act, 1961, for the assessment year 1978-79. The Income-tax Officer granted the investment allowance under section 32-A(2) but the Commissioner of Income-tax, exercising his jurisdiction under section 263 of the Income-tax Act, 1961, withdrew the investment allowance granted by the Income-tax Officer. The matter came up by way of second appeal before the Tribunal. The Tribunal held that inasmuch as the assessee succeeded on the merits in getting the investment allowance under section 32-A(2) of the Act, it is not necessary to go into the question of jurisdiction exercised by the Commissioner of Income-tax under section 263 of the Act.. Now, learned standing counsel appearing for the Department, brought to our notice a decision of the Supreme Court in CIT v. N.C. Budharaja & Co. (1993) 204 ITR 412, wherein the Supreme Court held that when the assessee engaged in construction work, the assessee is not doing any manufacture or processing, and, therefore, is not entitled to investment allowance under section 32-A. Therefore, in view of the said decision of the Supreme Court, we hive to hold that the Tribunal was not correct in granting investment allowance under section 32-A(2) of the Income-tax Act, 1961, in favour of the assessee in the present case. Accordingly, we answer the question referred to us in the negative and in favour of the Department. No costs. However, now the Tribunal is directed to dispose of the' appeal on the question of jurisdiction exercised by the Commissioner of Income-tax under section 263 of the Act, on merits, after giving an opportunity of being heard to the assessee.
Headnotes / Summary
Investment allowance
Assessee engaging in execution of civil contract works
No manufacture or processing involved when doing contract works- Assessee not entitled to investment allowance
Indian Income Tax Act, 1961, Ss.32A(2) &
263. The Income-tax Officer granted investment allowance under section 32-A(2) of the Income Tax Act, 1961, to the assessee-company, which was engaged in the business of executing civil contract works, for the assessment year 1978-79, but the Commissioner withdrew the investment allowance exercising his jurisdiction under section 263 of the Act. The Tribunal held that inasmuch as the assessee had succeeded on the merits in getting the investment allowance it was not necessary to go into the question of the jurisdiction exercised by the Commissioner under section
263. On a reference: Held, allowing the application, that in N.C. Budharaja's case (1993) 204 ITR 412, the Supreme Court held that an assessee engaged in the construction work, was not doing any manufacture or processing and, therefore, not entitled to investment allowance. Hence, the Tribunal was not justified in holding that the assessee was entitled to investment allowance under section 32-A(2) of the Act. CIT. v. N.C. Budharaja & Co. (1993) 204 ITR 412 (SC) fol. [The High Court directed the Tribunal to dispose of the appeal on the merits in respect of the question of jurisdiction exercised by the Commissioner under section 263 after giving an opportunity of being heard to the assessee.] C.V. Rajan for the Commissioner. R. Janakiraman for the Assessee.
Judgment & Decree
THANIKKACHALAM, J.
At the instance of the Department, the Tribunal referred the following question for the opinion of this Court, under section 256(1) of the Income-tax Act, 1961: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is justified in law in holding that the assessee is entitled to investment allowance prescribed under section 32-A(2) of the Income-tax Act, 1961, for the assessment year 1978-79 ?" The point for consideration is, whether the assessee, which is engaged in the business of executing civil contract works in entitled to investment allowance under section 32-A(2) of the Income-tax Act, 1961, for the assessment year 1978-79. The Income-tax Officer granted the investment allowance under section 32-A(2) but the Commissioner of Income-tax, exercising his jurisdiction under section 263 of the Income-tax Act, 1961, withdrew the investment allowance granted by the Income-tax Officer. The matter came up by way of second appeal before the Tribunal. The Tribunal held that inasmuch as the assessee succeeded on the merits in getting the investment allowance under section 32-A(2) of the Act, it is not necessary to go into the question of jurisdiction exercised by the Commissioner of Income-tax under section 263 of the Act.. Now, learned standing counsel appearing for the Department, brought to our notice a decision of the Supreme Court in CIT v. N.C. Budharaja & Co. (1993) 204 ITR 412, wherein the Supreme Court held that when the assessee engaged in construction work, the assessee is not doing any manufacture or processing, and, therefore, is not entitled to investment allowance under section 32-A. Therefore, in view of the said decision of the Supreme Court, we hive to hold that the Tribunal was not correct in granting investment allowance under section 32-A(2) of the Income-tax Act, 1961, in favour of the assessee in the present case. Accordingly, we answer the question referred to us in the negative and in favour of the Department. No costs. However, now the Tribunal is directed to dispose of the' appeal on the question of jurisdiction exercised by the Commissioner of Income-tax under section 263 of the Act, on merits, after giving an opportunity of being heard to the assessee. M.B.A./1389/FC Order accordingly.