THE COMMISSIONER OF INCOME TAX, PANAJI-GOA. vs. M/S D.B. BANDODKAR and SONS (P) LTD.,PANAJI-GOA.

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TXA/34/2003HC BombayHCBM05002195200315 December 2003Author: A.M.KHANWILKAR,P. V. HARDAS2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Bombay at Goa, in its decision dated 15th December, 2003, addressed the substantial question of law raised by the Revenue concerning the allowability of investment allowance under Section 32A of the Income Tax Act. The Court noted that this specific issue had already been decided by a division bench of the same High Court in its unreported decision in Tax Appeal Nos. 66/2002, 5/2003 and 6/2002, decided on 16th July, 2003, in the leading case of Commissioner of Income Tax vs. M/s. Sesa Goa Ltd. Following this precedent, the High Court found no reason to examine the question afresh. The Court held that it was bound by its earlier decision. Consequently, the appeals filed by the Revenue were dismissed. No specific issue was left undecided.

What were the facts?

The Commissioner of Income Tax (Revenue) filed Tax Appeals No. 34 of 2003 before the High Court of Bombay at Goa against an order of the Income Tax Appellate Tribunal (ITAT). The appeals concerned Assessment Year(s) not specified in the judgment. The Revenue challenged the ITAT's decision allowing the assessee, M/s. D.B. Bandodkar & Sons (P) Ltd., a deduction for investment allowance under Section 32A of the Income Tax Act, 1961. The core of the dispute was whether machinery used in mining activities, specifically iron ore extraction and processing, qualified for this allowance, with the Revenue arguing it did not constitute manufacturing or production of an article or thing. The appeals were filed under Section 260-A of the Income Tax Act.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was justified in holding that the assessee is entitled to deduction on investment allowance under Section 32A of the Income Tax Act, in respect of machinery used in mining activity, ignoring the fact that the assessee is engaged in extraction and processing of Iron Ore not amounting to manufacturing or production of any article or thing? Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The Revenue argued that the assessee's activity of extraction and processing of Iron Ore did not amount to manufacturing or production of any article or thing, and therefore, the machinery used therein was not eligible for investment allowance under Section 32A of the Income Tax Act. The Revenue relied on the High Court's unreported decision in Tax Appeal Nos. 66/2002, 5/2003 and 6/2002, decided on 16th July, 2003, in the case of Commissioner of Income Tax vs. M/s. Sesa Goa Ltd.

Which sections of the Income-tax Act were involved?

Section 32A,Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 34 OF 2003 THE COMMISSIONER OF INCOME TAX, ....Appellants PANAJI-GOA. Versus M/S D.B. BANDODKAR & SONS (P) ....Respondents LTD.,PANAJI-GOA. SHRI S.R. RIVANKAR WITH, Coram:- A.M.KHANWILKAR & P. V. HARDAS, JJ. Date:- 15th December, 2003 P.C.: Only one question is raised in these Appeals, being substantial question of law arising out of the impugned Order, to be examined by this Court in these Appeals under Section 260-A of the Income Tax Act, 1961. The same reads thus:- A) Whether on the facts and in the circumstances of the case, the ITAT was justified in holding that the assessee is entitled for deduction on investment allowance u/s 32 A of the IT Act, in respect of Machinery used in Mining activity ignoring the fact that the assessee is engaged in extraction and processing of Iron Ore not amounting to manufacturing or production of any article or thing?"

2.

Having considered the rival submissions, it is seen that insofar as the question regarding allowability of investment allowance on machinery is concerned, that issue stands answered by the unreported decision of our High Court in Tax Appeal Nos. 66/2002, 5/2003 and 6/2002, decided on 16th July, 2003. In the circumstances, we find no reason to examine that question afresh in these appeals. On the other hand, we are bound by the earlier decision of our High Court referred to above in the leading case of Commissioner of Income Tax vs. M/s. Sesa Goa Ltd.. 3. In the circumstances these Appeals fail and the same are dismissed. A.M.KHANWILKAR, J. P. V. HARDAS, J.

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