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Issues:
1. Validity of the investment allowance and industrial company status determination in the original assessment. 2. Jurisdiction of the Commissioner to revise the assessment orders. 3. Entitlement of the assessee to investment allowance. 4. Classification of the assessee as an industrial company. 5. Merger of assessment order with the order of the Commissioner (Appeals). 6. Jurisdiction of the Commissioner to revise the investment allowance granted under section 144B. Detailed Analysis: 1. The appeals by the assessee challenged the Commissioner's order under section 263 of the Income-tax Act, 1961, which directed the withdrawal of investment allowance and application of a higher tax rate. The original assessments allowed the investment allowance and treated the assessee as an industrial company. The Commissioner found these decisions erroneous and prejudicial to revenue interests, leading to the direction to withdraw the investment allowance and apply the higher tax rate. 2. The assessee contended that the original directions for investment allowance and industrial company status were not erroneous, challenging the Commissioner's jurisdiction to revise these aspects. Additional submissions were made regarding the merger of the assessment order with the Commissioner (Appeals) order and the investment allowance granted under section 144B. The departmental representative supported the Commissioner's decision based on reasons provided in the order. 3. The Tribunal analyzed whether the assessee was entitled to investment allowance based on the business nature. Previous Tribunal decisions supported the allowance for construction companies. The Tribunal held that the directions for investment allowance were not erroneous, citing relevant case law. Consequently, the Commissioner's direction to withdraw the investment allowance was deemed unsustainable. 4. The classification of the assessee as an industrial company was also scrutinized. The definition of industrial company and relevant case law were considered. The Tribunal concluded that the assessee did not fall under the definition of an industrial company, as per the Bombay High Court decision. The Commissioner's decision on this matter was upheld. 5. For the assessment year 1979-80, despite finding errors in the original assessment, the Tribunal noted that the net income remained nil even after withdrawal of the investment allowance, rendering the Commissioner's actions non-prejudicial to revenue interests. Therefore, the exercise of powers under section 263 was deemed unnecessary for that year. 6. Regarding the assessment year 1978-79, technical grounds were identified that prevented the Commissioner from exercising revisional powers under section 263. The Tribunal referenced relevant case law and held that the Commissioner lacked jurisdiction to revise the investment allowance granted under section 144B. The appeals for both years were allowed based on these technical grounds. In conclusion, the Tribunal allowed the appeals for the assessment years 1978-79 and 1979-80, and partly allowed the appeal for the assessment year 1980-81 based on the detailed analysis of the issues involved.
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