1992 (11) TMI 11 - HC - Income Tax

Appeal To AAC, Capital Asset, Capital Gains, Higher Rate, Market Value, Plant And Machinery, Priority Industry, Taxing Statutes

Summary

Issues:
1. Entitlement to development rebate at 35% on plant and machinery used for construction business.
2. Justification of Appellate Assistant Commissioner in not entertaining the plea for substituting market value of capital asset.
3. Tribunal's decision on declining to admit additional ground of appeal regarding surtax liability deduction.

Analysis:

Issue 1:
The court analyzed the relevant provision of section 33 to determine the entitlement to development rebate at 35% for plant and machinery used in the construction business. The court clarified that the phrase "for the purposes of business of construction, manufacture or production" in the statute did not require a separate interpretation for construction activities. It emphasized that the clause encompassed various activities related to the articles specified in the Fifth Schedule, including construction, manufacture, and production. The court rejected the argument that a comma after "construction" indicated a legislative intent for a separate construction business. It concluded that the assessee was not entitled to the 35% development rebate as claimed.

Issue 2:
Regarding the Appellate Assistant Commissioner's decision on not considering the plea for substituting the market value of the capital asset, the court referred to a Supreme Court decision in the Jute Corporation case, where it was established that such a plea should have been entertained. Therefore, the court held in favor of the assessee on this issue.

Issue 3:
The court addressed the Tribunal's refusal to admit an additional ground of appeal related to surtax liability deduction. Citing a Full Bench decision in the Ahmedabad Electricity case, the court ruled in favor of the assessee, stating that the Tribunal erred in declining to admit the additional ground of appeal. Consequently, the court answered this question in the affirmative, favoring the assessee.

The court provided detailed reasoning for each issue raised, citing relevant legal provisions and precedents to support its conclusions. The judgment clarified the interpretation of statutory provisions and upheld the assessee's position on some issues while ruling in favor of the revenue authorities on others.