1990 (4) TMI 83 - AT - Income Tax

Summary

Issues Involved:

1. Eligibility for relief under section 80J for the Krilo Unit.
2. Interpretation of the phrase "next following the first day of April 1948" in section 80J(4)(iii).

Issue-Wise Detailed Analysis:

1. Eligibility for Relief under Section 80J for the Krilo Unit:

The primary issue in this appeal was whether the Krilo Unit, which commenced production on 1-4-1981, was eligible for benefits under section 80J. The assessee argued that the period of 33 years mentioned in section 80J(4)(iii) should be interpreted to begin from 2-4-1948 and end on 1-4-1981, thus making the unit eligible for the relief. The CIT(A) rejected this claim, interpreting the period to start from 1-4-1948 and end on 31-3-1981, thereby excluding the Krilo Unit from the relief for the assessment year 1982-83.

2. Interpretation of the Phrase "Next Following the First Day of April 1948" in Section 80J(4)(iii):

Shri Dastur, representing the assessee, argued that the term "next following" should be interpreted to mean the period starting from 2-4-1948. He cited various legal precedents and dictionary definitions to support this interpretation. He also argued that sections 80J and 80I were not inter-linked and provided different types of reliefs, which could be claimed simultaneously.

On the other hand, Shri B.G. Agarwal, representing the revenue, argued that the period should be interpreted in terms of financial years, starting from 1-4-1948 and ending on 31-3-1981. He cited departmental circulars and various judicial decisions to support his argument. He emphasized the importance of legislative history and harmonious construction of statutes to avoid absurd results.

Tribunal's Decision:

The Tribunal carefully considered the submissions and reviewed the legislative history and judicial precedents. It concluded that the period mentioned in section 80J(4)(iii) should be interpreted in terms of financial years, starting from 1-4-1948 and ending on 31-3-1981. The Tribunal noted that this interpretation was consistent with the historical understanding and authoritative commentaries on the Income-tax Act.

The Tribunal rejected the assessee's argument that the period should start from 2-4-1948 and end on 1-4-1981. It held that such an interpretation would lead to absurd results and was not supported by the legislative intent. The Tribunal emphasized that the relief under section 80J was not available to the Krilo Unit, which started manufacturing on 1-4-1981.

Conclusion:

The Tribunal upheld the CIT(A)'s decision, rejecting the assessee's claim for relief under section 80J for the Krilo Unit. The appeal was allowed in part, but the specific ground regarding section 80J was dismissed. The Tribunal's decision was based on a thorough analysis of the legislative history, judicial precedents, and the need for a harmonious construction of the statute to avoid absurd results.