COMMISSIONER OF INCOME TAX vs. APOLLO VIKAS STEELS (P) LTD

ITR/150/1995HC GujaratGJHC24022473199522 December 2005Author: HONOURABLE MR. JUSTICE D.A.MEHTA,HONOURABLE MS. JUSTICE HARSHA DEVANI4 pages
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What were the facts?

The Income Tax Appellate Tribunal (ITAT) referred a question of law to the High Court of Gujarat concerning assessment year 1985-86. The assessee, Apollo Vikas Steels (P) Ltd, claimed deductions under sections 32A, 80-HH, and 80-I, asserting that ship breaking constituted a manufacturing activity. The revenue contested this classification. The High Court noted that the issue was concluded by its prior decision in Commissioner of Income Tax v. Vijay Ship Breaking Corporation (2003) 261 ITR 113, which was in favor of the revenue. The assessee's counsel informed the court that a Special Leave Petition (SLP) had been granted by the Supreme Court against the Vijay Ship Breaking Corporation decision.

What did the High Court hold?

The High Court of Gujarat, applying the ratio of its own decision in Commissioner of Income Tax v. Vijay Ship Breaking Corporation (2003) 261 ITR 113, answered the referred question in the negative. This means the Tribunal was held to be incorrect in its finding that ship breaking was a manufacturing activity. Consequently, the assessee was not entitled to the deductions claimed under sections 32A, 80-HH, and 80-I. The operative direction was to answer the reference in favor of the revenue and against the assessee. The court certified the case as fit for appeal to the Supreme Court, noting that an SLP had been granted against the precedent decision. No issue was expressly left undecided.

What were the issues?

1. Whether the Appellate Tribunal was right in law and on fact in holding that ship breaking was a manufacturing activity, thereby entitling the assessee to deduction under section 32A of the Income Tax Act, 1961? 2. Whether the Appellate Tribunal was right in law and on fact in holding that ship breaking was a manufacturing activity, thereby entitling the assessee to deduction under section 80-HH of the Income Tax Act, 1961? 3. Whether the Appellate Tribunal was right in law and on fact in holding that ship breaking was a manufacturing activity, thereby entitling the assessee to deduction under section 80-I of the Income Tax Act, 1961? Assessee's Contentions: The assessee contended that ship breaking constituted a manufacturing activity and therefore was eligible for the deductions claimed under sections 32A, 80-HH, and 80-I. Revenue's Contentions: The revenue contested the assessee's claim that ship breaking was a manufacturing activity. The judgment does not explicitly detail the revenue's arguments beyond this.

Which sections of the Income-tax Act were involved?

Section 32A,Section 80-HH,Section 80-I,Section 256(1),Section 261

AI-generated summary — verify with the full judgment below

ITR/150/1995 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 150 of 1995 For Approval and Signature: HONOURABLE MR.JUSTICE D.A.MEHTA HONOURABLE MS.JUSTICE H.N.DEVANI ============================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================= COMMISSIONER OF INCOME TAX - Applicant(s) Versus APOLLO VIKAS STEELS (P) LTD - Respondent(s) ================================================= Appearance : MR MANISH R BHATT for Applicant(s) : 1, MR RK PATEL for Respondent(s) : 1, =================================================

ITR/150/1995 2/4 JUDGMENT CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 22/12/2005 ORAL JUDGMENT (Per : HONOURABLE MS.JUSTICE H.N.DEVANI) 1 The Income Tax Appellate Trib

The order continues below.

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