BANYAN & BERRY vs. COMMISSIONER OF INCOME TAX

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ITR/64/1987HC GujaratGJHC24011797198728 June 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Gujarat, per Mr. Justice A.R. Dave and Mr. Justice D.A. Mehta, held that the assessee was not engaged in the manufacture of an "Article" and consequently was not entitled to the benefits of Section 80HH of the Income-tax Act. The Court's reasoning was based on a fair submission by both learned advocates that the question had already been answered by the Hon'ble Supreme Court in the case of Commissioner of Income-tax Vs. N.C. Budharaja (reported in 204 I.T.R. 412). Following this precedent, the Court concluded that the assessee, engaged in the construction of a dam, could not be considered as engaged in the manufacture of any article. Therefore, the assessee could not claim the benefit under Section 80HH. The question was answered in the affirmative, meaning against the assessee and in favour of the Revenue. The reference was disposed of with no order as to costs.

What were the facts?

The assessee, Banyan & Berry, sought a reference to the High Court of Gujarat concerning the assessment year(s) not specified. The Income-tax Appellate Tribunal, Ahmedabad Bench "C", referred a question of law for the Court's opinion. The dispute revolved around the assessee's eligibility for benefits under Section 80HH of the Income-tax Act. The core of the matter was whether the assessee's activity, described as the construction of a dam, constituted the "manufacture of an Article" as required by the said section. The procedural history indicates this is a reference under Section 256(1) of the Income-tax Act.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, it could be held that the assessee was not engaged in the manufacture of an "Article" and consequently not entitled to the benefits of section 80HH of the Income-tax Act (a question of law turning on the interpretation of Section 80HH). Assessee's Contention: The assessee, through its advocate Mr. R.K. Patel, implicitly argued that its activities qualified for the benefits of Section 80HH, which would necessitate being engaged in the manufacture of an article. The specific arguments are not detailed, but the reference itself indicates a dispute on this point. Revenue's Contention: The Revenue, represented by Mr. Akil Qureshi, contended that the assessee's activity of constructing a dam did not amount to the "manufacture of an Article" and therefore, the assessee was not entitled to the benefits of Section 80HH. The Revenue relied on the Supreme Court decision in Commissioner of Income-tax Vs. N.C. Budharaja.

Which sections of the Income-tax Act were involved?

Section 80HH,Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 64 of 1987

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE D.A.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- @ BANYAN & BERRY Versus COMMISSIONER OF INCOME TAX -------------------------------------------------------------- Appearance: MR RK PATEL WITH MR.B.D.KARIA for Applicant. MR AKIL QURESHI FOR MR MANISH R BHATT for Respondent No. 1 -------------------------------------------------------- CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE D.A.MEHTA Date of decision: 28/06/2001 ORAL JUDGEMENT (Per : MR.JUSTICE A.R.DAVE) 1 At the instance of the assessee, the following question of law has been referred to this Court for its opinion under the provisions of section 256(1) of the Income-tax Act by the Income-tax Appellate Tribunal, Ahmedabad Bench "C".

"Whether, on the facts and in the circumstances of the case, it could be held that the assessee was not engaged in the manufacture of an "Article" and consequently not entitled to the benefits of section 80HH of the Income-tax Act."

2.

We have heard learned Advocate Mr.R.K.Patel appearing for the applicant - assessee and learned Advocate Mr.Akil Qureshi for the Revenue.

3.

It has been fairly submitted by the learned Advocates that the question referred to hereinabove has already been answered by the Hon'ble Supreme Court in the case of Commissioner of Income-tax Vs. N.C.Budharaja reported in 204 I.T.R.412. Accordingly, we hold that the assessee, who was engaged in construction of a dam cannot be said to be engaged in manufacture of any article, and therefore, the assessee cannot claim benefit under the provisions of section 80HH of the Act.

4.

In view of the law laid down by the Hon'ble Supreme Court in the judgment referred to hereinabove, we answer the question in the affirmative i.e. against the assessee and in favour of the Revenue.

5.

The Reference stands disposed of with no order as to costs. (A.R.Dave, J) (D.A.Mehta,J)

m.m.bhatt

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