1993 (8) TMI 13 - HC - Income Tax

Summary

Issues:
1. Interpretation of provisions of section 32A of the Income-tax Act, 1961 regarding investment allowance.
2. Correctness of the Tribunal's decision on additional equipment and apparatus being part of plant and machinery for manufacturing tissue papers.
3. Discrepancy in the statement of case prepared by the Tribunal for assessment years 1979-80 and 1980-81.
4. Relief under section 80J of the Income-tax Act for new industrial undertakings.
5. Rectification proceedings under section 154 of the Act.
6. Appeals before the Commissioner of Income-tax (Appeals) and the Tribunal.
7. Discharge of rules issued by a Division Bench of the High Court.
8. Necessity of a supplementary statement of case.
9. Precedent set by a previous judgment of the High Court on a similar question for the assessment year 1978-79.

Analysis:
1. The High Court of Calcutta dealt with a reference under section 256(2) of the Income-tax Act, 1961, for the assessment year 1980-81. The main issue was whether the Tribunal was correct in allowing investment allowance on additional equipment and apparatus used for manufacturing tissue papers, considering them as part of plant and machinery. The Court noted a discrepancy in the Tribunal's statement of case, which included facts related to relief under section 80J for assessment years 1979-80 and 1980-81, not pertinent to the current reference.

2. The facts surrounding the allowance of relief under section 80J for a new industrial undertaking in the paper industry were discussed. The Assessing Officer had initially allowed relief under section 80J, but rectification proceedings under section 154 were initiated. The Commissioner of Income-tax (Appeals) ruled in favor of the assessee, leading to appeals before the Tribunal. The Tribunal upheld the Commissioner's decision, denying rectification under section 154 and confirming the relief under section 80J.

3. The Tribunal's order was challenged by the Department through applications under section 256(1) of the Act, which were rejected. Subsequently, the Department filed applications under section 256(2) before the High Court, leading to a Division Bench discharging the rules issued. This discharge rendered the preparation of a statement of case by the Tribunal unnecessary for the relief under section 80J for the relevant assessment years.

4. Despite the Tribunal's error in the statement of case, the High Court addressed the correct question of law regarding investment allowance for the assessment year 1980-81. The Court referenced a previous judgment involving the same assessee for the assessment year 1978-79, where a similar question was answered in favor of the assessee by a Division Bench. Following this precedent, the High Court ruled in favor of the assessee in the current reference.

5. The judgment concluded by affirming the Tribunal's decision to allow investment allowance on the additional equipment and apparatus, aligning with the precedent set by the previous judgment. No costs were awarded in this matter, and both judges, Nure Alam Chowdhury and Ajit Kumar Sengupta, concurred with the decision.