Ita/23/2006 Of The Commissioner Of Income-Tax,Bombay, City-Viii v. Photophone Ltd

Dixit IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.23 OF 2006 The Commissioner of Income Tax.City-VIII, Bombay....AppellantV/s.Photophone Ltd., Mumbai...Respondent Mr.Suraj M. Shah i/b. Mr.H.D. Rathod for the Appellant.Mr.Percy Pardiwala with Ms.Aarti Jumani i/b.M/s.Rustomji & Ginwala for the Respondent. P.C. : 1.The Appellant has approached this Court beingaggrieved by the order of the Tribunal dated 31.05.2001by way of present Appeal. The reference is sought inrespect of the following questions :- "1.Whether on the facts and in thecircumstances of the case, the Hon’bleTribunal erred in law in holding that the GoaUnit of the assessee company was a small scaleindustrial undertaking within the meaning ofSection 32A of the I.T. Act and was thuseligible for Investment Allowance even thoughthe items manufactured by the unit arespecified in Schedule Eleven of the I.T. Act, 1961. 2.Whether on the facts and in thecircumstances of the case, the Hon’bleTribunal erred in law in holding that thepayment of bonus by the assessed was inaccordance with the provisions of Payment ofBonus Act and not in excess of the saidprovisions as held by the Assessing Officer. 3.Whether on the facts and in thecircumstances of the case, the Hon. Tribunalerred in law in holding that the expenditureincurred on the repairs of motor cars shouldnot be included for working out thedisallowance u/s.37(3A) of the I.T. Act?" 2.In so far as the first question is concerned,the Tribunal had proceeded on the footing that theRespondent has earlier been held to be a small scaleindustrial undertaking. The Tribunal noted that thosearticles manufactured are in the 11th schedule,however, held that the aggregate value of plant andmachinary on the first day of the accounting year didnot exceed the sum of Rs.20 lakhs which was theprescribed minimum. In answer, it is sought to becontended that this finding is not correct as therecord would show that the investment of the Respondent’s plant and machinary is over Rs.20 lakhs.If that be the case, that would be a finding of factand it is open to the Appellant to apply forrectification of the order where the Respondent hasbeen held to be a small scale industry, if in law nowpermissible. On behalf of the Respondents, it iscontended that though the Balance Sheet in respect ofall the three Units including the Bombay Unit is one,both the Goa Units are concerned, are small scaleUnits. One Unit was set up to manufacture ofprojectors and a second unit was set up in Goa in 1983for manufacture of cameras. 3.In so far as Question No.2 is concerned, theTribunal proceeded on the basis that the assessee wasbound to comply with the provisions of the Payment ofBonus Act and on failure to do so would suffer penalconsequences. In answer, on behalf of Revenue,reliance have been placed in the judgment of theKarnataka High Court in Widia (India) Ltd. v/s. ChiefCommissioner of Income Tax (Admn.) & Anr. reported in233 ITR. On perusal of the facts therein, it would beclear that the Karnataka High Court proceeded on thefooting that though there was surplus, the same had notbeen distributed. In so far as facts of the presentcase are concerned, there is recorded a finding of factthat the bonus has been paid. Once that be the case,the question of law as framed would not arise. : 4 : 4.In so far as last question is concerned, theTribunal has relied on various judgments including thejudgment of this Court in the case of CIT v/s. ChaveBright Steel Ltd. (No.1) 177 ITR 124. No illegalityis pointed out in respect of the conclusions. 5.In our opinion, for the above reasons theAppeal stands dismissed. [J.P. DEVADHAR, J.] [F.I. REBELLO, J.]