9911796707
TMI Blog1986 (2) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... iginal assessments, the ITO had allowed investment allowance and had also treated the assessee-company as Industrial Company within the meaning of the relevant Finance Act and had applied the rate of tax 60 per cent, which was prescribed for and applicable to 'Industrial Company' as against the rate of tax of 65 per cent prescribed for those companies, which were not industrial companies. In his order under s. 263 of the Act, the CIT held that the findings of the ITO that the assessee company was an industrial company and further that the assessee company was entitled to investment allowance were erroneous and were also prejudicial to the interests of revenue. He, accordingly, directed the ITO to withdraw the investment allowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such, powers under s. 263 could not have been exercised. The ld. Departmental Representative, on the other hand, has relied on the reasons given in the order of the CIT in support of his submission that the investment allowance had been wrongly allowed in the original assessment order and that the assessee company had wrongly treated as an industrial company in the said order and, as such, the CIT was justified in revising the said order. As regards, the additional grounds for the asst. yr. 1978-79 raised by assessee, the ld. Departmental Representative submitted that since the items relating to investment allowance and treating of the assessee-company as an Industrial Company were not the subject matter of the appeal before the CIT(A), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance was allowable. The latest decision in M/s Shah Construction Co. vs. ITO (ITA No. 3665/Bom/83 dt. 19th July, 1985). In that decision all the case including several decisions of the Bombay High Court which had been relied on by the ld. Departmental Representative for the submissions before us were duly considered and it was held that construction company was entitled to investment allowance. The reason given was that they are in the definition of industrial company the words are construction of ship while in cl. (iii) of s. 32A(2)(b) the expression is construction of an article or thing, not being an article or thing specified in the list of the Eleventh Schedule . The business of construction of buildings would be business of cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (1980) 126 ITR 377and it also was held that such company did not fall within the definition of an Industrial Company as given in the relevant finance Act. It is true that some other High Courts had taken slightly different view. However, we are bound by the decision of the Bombay High Court. The assessee had submitted before the CIT that the decision of the Bombay High Court was wrong and that there was contrary decision of the Bombay High Court was wrong and there was contrary decision of the Calcutta High Court in National Planning Construction Ltd. vs. CIT (1980) 122 ITR 197(Cal). He had also cited the decision of the Delhi High Court before the CIT and had made submissions to show that the decision of the Bombay High Court was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was not entitled to be treated as an industrial company for the purpose of concessional rate of tax. In view of the above findings recorded by us, the appeal for the asst. yr. 1980-81 is liable to be partly allowed. however, as far as the appeal for the asst. yr. 1979-80 is concerned that appeal is liable to be allowed in spite of the above findings. This is because of the following facts. In the assessment year the net income computed in accordance with the Act before deduction under Chapter VIA came to ₹ 1,71,68,441. The figure was arrived at after deduction of investment allowance of ₹ 2,28,916. The total amount deductible under Chapter VIA was ₹ 1,94,37,598. Since this amount exceeded the income computed prior to ded ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
