Commissioner Of Income Tax Ii- , Amritsar v. M S/ . Embrocia Farms Private Limitedvillage Kotli, District Gurdaspur

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ----- -Income tax Appeal No. 127 of 2002Date of decision: 14.7.2010 -Commissioner of Income tax II- , Amritsar Versus --- Appellant M s/ . Embrocia Farms Private LimitedVillage Kotli, District Gurdaspur --- Respondent --- CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOELHON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- PRESENT:Ms. Navender P K . . Singh, Advocatefor the appellant. --- AJAY KUMAR MITTAL , .J -This order will dispose of two appeals, Income taxAppeal Nos. 127 and 153 of 2002 preferred by the Revenue,pertainingtotheassessmentyears 1987-88 and 1986-87,respectively, as the facts and the question of law involved in -Income tax Appeal No both is common. The facts have, however, been taken fromITA No. 127 of 2002. TheRevenuehasclaimedthatthefollowingsubstantialquestionoflawarisesinthisappealforadjudication by this Court: adjudication by this Court: “Whether on the facts and in the circumstances ofthecasetheTribunalwasjustifiedinlawinholding that the assessee which is running poultryfar is entitled to deductions u ss /. 80- J and 32-A-of the Income tax Act ”. The assessee filed return for the assessment year1987-88 declaring loss of Rs. 16,85,800/-. Accordingly, theassesseeclaimeddeductioninthesum of Rs. 93,750/-underSection 80- JandofRs.3,92,548/- under Section32-AoftheIncomeTaxAct, 1961 (for short “the Act”).-TheDeputyCommissionerofIncome tax, SpecialRange,Amritsar, disallowedtheclaimoftheassesseereferred to above, observing that since the business activities carried onby the assessee were not considered to be of an industrial undertakingasheldinthecasespertainingtoassessmentyears 1984-85 and 1985-86, it was not possible to entertainthe claim of the assessee for the assessment years 1986-87and 1987-88 also. Assessment under Section 143(3) of theActwas, thus, completedatincomeofRs nil., vide orderdated 17.3.1993. The assessee challenged the said order bypreferring appeal. -TheCommissionerofIncome tax (Appeals),Amritsar, [(for short “the CIT A ”( ) ], following the order of the-Income taxAppellateTribunal, fortheassessmentyears1984-85 and 1985-86, held vide order dated 9.11.1994 that-theassessee companywasanindustrialunitand, thus,entitled to claim deductions. It accordingly issued a direction-to the assessing officer to allow the claim of the assesseerespondent. AggrievedbytheorderoftheCIT A( ), the-RevenuecarriedappealbeforetheIncome taxAppellateTribunal, Amritsar Bench, Amritsar (for short “the Tribunal”).TheTribunaldismissedtheappealvideorderdated18.12.2001. We have heard learned counsel for the appellantand have perused the case. The question that arises for theconsideration of this Court in these appeals is, whether the-assessee respondent which was carrying on the business ofPoultryFarmcanbesaidtohavebeenmanufacturing orproducinggoodssoastobetermedasanindustrialundertaking under the provisions of Sections 80- J and 32-Aof the Act. This matter is no longerres integra. The apexCourtinCIT . vVenkatshwaraHatcheries ( ) PLtd. (1999)237 ITR 174 has held that such an assessee is not entitledtoinvestmentallowanceunderSection 32-Aand specialdeduction under Section 80 J are not allowable in respect ofpoultryfarming, fisheriesanddairyfarmingasthey do notmanufacture or produce articles or things and, thus, are notan ‘industrial undertaking’. Inviewoftheaforesaidcomprehensible-observationsoftheSupremeCourt, theassessee companycannot be termed as an industrial undertaking and once thatis so, it is legally not entitled to claim deductions referred toabove. Thesubstantialquestionoflaw, noticed above is, therefore, answered in favour of the Revenue and against the assessee . The appeals stand disposed of accordingly . (AJAY KUMAR MITTAL)JUDGE GOEL)July 14, 2010*rkmalik* (ADARSH KUMARJUDGE