COMMISSIONER OF INCOME TAX, CH vs. M/S.SAGRI POULTRY BREEDING FAR

ITR/191/1999HC Punjab & HaryanaPHHC01038639199904 December 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL1 pages
AI SummaryDismissed

What were the facts?

The Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, passed an order on August 13, 1998, in I.T.A. No. 1857/Chandi/91, concerning assessment year 1988-89. The Commissioner of Income Tax, Chandigarh (Revenue) has referred a question of law to the High Court of Punjab and Haryana at Chandigarh arising from this order. The dispute pertains to the deletion of an addition of Rs. 88,261/- made by the Assessing Officer on account of disallowance of investment allowance. The ITAT held that the hatchery business is an industrial undertaking within the meaning of Section 32A of the Income Tax Act, leading to the deletion of the addition.

What did the High Court hold?

The High Court of Punjab and Haryana at Chandigarh answered the question of law in favour of the Revenue and against the assessee. The Court noted that the issue had already been decided by it in the case of Commissioner of Income Tax, Patiala Vs. M/S Bee Pee Poultries, Barnala, ITR No.70 of 1999, decided on September 19, 2006. In that precedent, the Court had answered a similar question in favour of the Revenue. Therefore, following its earlier decision, the High Court held that the ITAT was not right in deleting the addition. The references were disposed of in light of this judgment.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in deleting the addition of Rs. 88,261/- made on account of disallowance of investment allowance by holding that hatchery business is an industrial undertaking within the meaning of Section 32A of the Income Tax Act? Assessee's contention: The ITAT was correct in holding that a hatchery business constitutes an industrial undertaking for the purpose of investment allowance under Section 32A, thereby justifying the deletion of the addition. Revenue's contention: The ITAT erred in law by holding that a hatchery business is an industrial undertaking, and the addition made on account of disallowance of investment allowance should be sustained. The Revenue relies on the High Court's judgment in Commissioner of Income Tax, Patiala Vs. M/S Bee Pee Poultries, Barnala, ITR No.70 of 1999 decided on 19.9.2006.

Which sections of the Income-tax Act were involved?

Section 32A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.R No.191 of 1999 Date of decision:4.12.2006 Commissioner of Income Tax, Chandigarh ...Petitioner Versus M/S Sagri Poultry Breeding Farms, Chandigarh ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE RAJESH BINDAL Present: Mr.S.K.Garg Narwana, Advocate for the Revenue. ****

JUDGMENT Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh arising out of its order dated 13.8.1998 passed in I.T.A.No.1857/Chandi/91, in respect of the assessment years 1988- 89. “Whether on the facts and in the circumstance of the case, the ITAT was right in law in deleting the addition of Rs.88,261/- made on account of disallowance of investment allowance by holding that hatchery business is an industrial undertaking within the meaning of section 32 A of the Income Tax Act?”

Learned counsel for the Revenue points out that the issue has been gone into by this Court in The Commission of Income Tax, Patiala Vs. M/S Bee Pee Poultries, Barnala, ITR No.70 of 1999 decided on 19.9.2006 a

The order continues below.

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