INCOME TAX OFFICER C WARD Vs. BHOIR DREDGING CO PVT LTD
LAWS(IT)-1994-7-15
INCOME TAX APPELLATE TRIBUNAL
Decided on July 19,1994

Appellant
VERSUS
Respondents

JUDGEMENT

T.A. Bukte, Judicial Member - (1.) THIS is a Revenue's appeal against the order of the Commissioner of Income-tax (Appeals), Pune, dated December 29, 1987, on three grounds. All the grounds raised in this appeal relate to the only one issue against the Commissioner of Income-tax (Appeals') direction to the Income-tax Officer to allow investment allowance on a dredger.
(2.) We have heard the learned Departmental Representative, Shri Prashant Gupta, and learned counsel for the assessee, Shri Y.P. Trivedi. Their arguments are taken into consideration. At the outset, the learned Departmental Representative has pointed out that the issue involved in this appeal is already covered by the decision of the Bombay Bench 'B' of the Tribunal in the case of Thane Reti Vita Utpadah Sahakari Society Ltd. v. ITO [1991] 39 ITD 163. Shri Gupta pointed out that the Bombay Bench of the Tribunal held in that case that from the activity carried on by the assessee in removing the sand from the sea/ river bed and washing and cleaning it, it could not be said that the assessee was engaged in any construction/manufacture or production activity. The Bombay Bench further held that the Schedule of depreciation contained in the Income-tax Rules, 1962, would also not help the assessee as only those dredgers, tugs, barges, etc., which are mainly used for dredging purposes and fishing vessels would qualify to be ships. The Bombay Bench also held that the dredger was not used for dredging sea/river bed but was mainly used for lifting out sand from the sea/river bed. Therefore, the assessee was not entitled to investment allowance under Section 32A as claimed by it. Shri Gupta urged that the issue involved in this appeal is clearly covered by the order of the Bombay Bench 'B' of the Tribunal and in this view of matter, the order of the Commissioner of Income-tax (Appeals) should be reversed and that of the Income-tax Officer restored.
(3.) LEARNED counsel for the assessee, Shri Y.P. Trivedi, argued at length. He has propounded certain propositions. He has distinguished the decision of the Bombay Bench 'B' of the Tribunal (Thane Reti Vita Utpadak Sahakari Society Ltd. v. ITO [1991] 39 ITD 163 (Bom)). He has also cited certain other decisions, such as decisions of the Andhra Pradesh High Court and the Karnataka High Court to bring home the point and contended that the activity undertaken by the assessee would amount to nothing but manufacture or production activity. He has also pointed out that the assessee in the case of Thane Reti Vita Utpadak Sahakari Society Ltd. [1991] 39 ITD 163 (Bom) had made an application to rectify the said order of the Bombay Bench 'B' of the Tribunal. However, making an application to rectify the said order does not throw any light. He argued that it would appear as if the point involved in this appeal is covered by the decision of the Bombay Bench 'B' of the Tribunal, but, in fact, the point involved herein is not actually firstly covered and, secondly, there is an amendment to the depreciation schedule in which dredger is included with effect from April 1, 1985, and also the decisions of the Andhra Pradesh and Karnataka High Courts are required to be considered. For these reasons, Mr. Trivedi contended that this matter requires to be decided on the merits.;


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