BROOKE BOND INDIA LTD., ,KOLKATA vs. DCIT, SPECIAL RANGE - 2, KOLKATA

It emerges at the outset that instant appeal has been listed in furtherance to hon'ble jurisdictional high court’s judgment in ITR No. 8 of 2000 decided on 18.06.2018. A co-ordinate bench had decided the instant appeal on 20.10.1997 Assessment Year 1983-84 Brooke Bond India Ltd. Vs DCIT, Special Range-2 Kol. Page 2 at the first instance. The assessee then filed its reference application RA No.659/Kol/1997 u/s 256(1) of the Act. Learned co-ordinate bench’s order dated 07.01.2000 referred the following modified questions for hon'ble jurisdictional high court’s adjudication "i) Whether, having regard to the fact that both the Assessing Officer and the Commissioner of Income Tax (Appeals) had treated the assessee as being engaged in the manufacture and/or production of packet tea, coffee and instant coffee, etc., and that the Department had not challenged the said findings of the lower authorities in any appeal filed by it, the Tribunal was Justified in raising the said issue as to whether the blending of tea coffee amounts to manufacture and/or production and deciding the questions against the assessee. ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that blending of tea and/or coffee does not amount to manufacture or production of an article or thing and in that view in upholding the order of the lower authorities not granting investment allowance on weighing machines, computers and electrical appliances, etc.? iii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in upholding the order of the lower authorities in not granting investment allowance on weighing machines, computers and electrical appliances, etc. also on the ground that these items of plants and machineries were not directly engaged in the production of an article or thing?"

We find in this backdrop of facts that hon'ble jurisdictional high court’s judgment dated 18.06.2018 has first of all held that the tribunal ought to have proceeded on the footing that blending of tea and coffee in question amounts to manufacture or production in assessee’s case as settled in assessment years 1981-82 and 1982-83. Their lordship have accepted the former two reference questions in taxpayer’s favour in this manner.

Coming to the third question in tribunal’s reference raising investment allowance issue on weighing machines, computers and electrical appliances on the ground that these items of plant and machineries are not directly engaged in production of an article or a thing, we find that their lordships have held the same to be eligible for sec. 32(A)(2)(iii) investment allowance deduction. The assessee has succeeded on both issues in hon'ble jurisdictional high court Assessment Year 1983-84 Brooke Bond India Ltd. Vs DCIT, Special Range-2 Kol. Page 3 therefore. We accordingly direct the Assessing Officer to delete the two corresponding disallowance(s) / addition(s) forming subject-matter of the instant appeal.