DEPUTY COMMISSIONER OF INCOME TAX Vs. BHAGEERATHA ENGINEERING CO LTD
INCOME TAX APPELLATE TRIBUNAL
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G.SANTHANAM, A.M. : -
(1.) THIS is a Miscellaneous Petition preferred by the Revenue in relation to the order of the Tribunal dt. 21st May, 1993 in ITA Nos. 589 & 590/Coch/1988. The assesses is an engineering construction company with previous year ending on 31st March of every year. The concerned assessment years are 1982-83 and 1983-84.
(2.) For the asst. yr. 1982-83, the assessee had purchased machinery and equipments of the tune of Rs. 11,95,18,733 in connection with its major contract for execution of Mussayeb-Kerbala - Najaf-Samawa Railway Project at Iraq in association with Indian Railway Construction Company. In addition, it also purchased machinery worth Rs. 1,85,42,528 in connection with work in India. It claimed investment allowance to the extent of Rs. 3,22,79,957 after creating the necessary reserve.
For the asst. yr. 1983-84, the assessee had purchased machinery and equipments to the tune of Rs. 3,18,38,260 for the execution of its work in Iraq. It had also purchased machinery worth Rs. 1,22,44,037 for its work in India. It claimed investment allowance to the extent of Rs. 1,09,99,748. The conditions regarding the creation of reserves stood complied with for both the years.
(3.) THE Assessing Officer negatived the claim of the assessee on the strength of the decision of the Calcutta High Court in Addl. CIT vs. Mukherjee & Co. (1978) 113 ITR 718 (Call) and the decision of the Bombay High Court in CIT vs. Shah Construction Co. (1983) 142 ITR 696 (Bom) and also the decision of the Pune Bench of the Tribunal in the case of WTO vs. Lalchand Manekchand Mehta Bhosawal (WTA Nos. 82 & 83/PN/77-78) which held that the construction company cannot be treated as an industrial company.;
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