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TMI Blog1996 (9) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the 11th Schedule of the Act." 3. Briefly stated, the assessee is a private limited company of contractors engaged in the business of grouting and drilling of dams. In the assessment year 1988-89, the previous year of which elided on 30-9-1987, the assessee claimed deduction of Rs. 52,154 under section 32AB. During the course of assessment proceedings, the assessee was required to justify its claim of said deduction. It was explained by the assessee that the assessee's business of grouting and drilling of dams is not covered under 11th Schedule. It was also contended that if construction of things like building, dams, roads and bridges, etc., was considered for disqualification for deduction under section 32AB, it would be necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year or before furnishing the return, whichever is earlier or is utilised during the previous year for purchase of a new ship, new air-craft or new machinery or plant. The expression 'eligible business or profession' has been defined in sub-section (2)(i)(a) (b) of section 32AB. As per this definition, the business of construction has been excluded from the definition of the 'eligible business' for the purposes of deduction under section 32AB. The words 'article or thing' do not qualify construction. These words qualify 'manufacture or production'. He, therefore, submitted that the assessee being engaged in the business of construction is not an eligible assessee within the meaning of section 32AB(1) read with section 32AB(2)(i) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ession used in the statute. 7.1 In the case of Keshavji Ravji Co., their Lordships of the Apex Court have held that the Board conduct pre-empt a judicial interpretation of the scope and ambit of a provision of the Act by issuing circular on the subject. This is too obvious a proposition to require any argument for it. A circular cannot even impose on the taxpayer a burden higher than what the Act itself, on a true interpretation, envisages. The task of interpretation of the laws is the exclusive domain of the Courts. 7.2 In the case of Delhi Flour Mills Co. Ltd., their Lordships of Delhi High Court have held that decisions of the Central Board of Direct Taxes are not binding upon Courts. They are meant only for the guidance of the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is not to be found in the statute. It is also well-settled that circulars are issued for a just and fair administration of the various provisions of the Act. In the case of CIT v. India Sea Foods [ 1991] 192 ITR 515 (Ker.), the Court held that the circular of the Board has the force of law. It can supplant the law where it is beneficial to the assessee and has mitigated or relaxed the rigour of law. It can be enforced by the Courts. The Lordships of the Apex Court have held in the case of Ellerman Lines Ltd. v. CIT [1971] 82 ITR 913 that even if the directions given in a circular by CBDT deviate from provisions of the Act, they are binding on ITO. Hon'ble Gujarat High Court has explained this decision in CIT v. Ahmedabad Keiser-E-Hind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Schedule to the Income-tax Act. In other words, the deduction is admissible to all the assessees who carry on "eligible business or profession", which as per section 32AB(2) means business or profession other than the business of construction, manufacture or production of any article or thing specified in the list in the Eleventh Schedule (in case it is not a small scale industrial undertaking) and the business of leasing or hiring of machinery or plant to an industrial undertaking other than a small scale industrial undertaking engaged in the business of low priority items as specified in the list in the Eleventh Schedule. It may be clarified that the business of construction is an eligible business for the purposes of this provision." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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