- (1.) T. C. Nos. 20 to 24 of 1989 : Under Article 139-A of the Constitution, the appeals which were pending before the Income-tax Appellate Tribunal were transferred to this Court and numbered as Transferred Cases Nos. 20-24 of 1989. Transferred Cases Nos. 20-21 and 24 of 1989 are filed by assessee-the Indian Hotels Co. Ltd. and others, which pertain to the Assessment Years 1977-78, 1978-79 and 1976-77 respectively. Transferred Cases Nos. 22 and 23 of 1989 are filed by the Revenue and pertain to Assessment Years 1977-78 and 1978-79. At the outset, we may point out that at the time of hearing of these cases, learned counsel for the parties confined their submissions to the Flight Kitchen operated by the assessee-Indian Hotels. Hence, other contentions raised in these cases are not required to be dealt with.
(2.) In the appeals, the Commissioner of Income-tax (Appeals) accepted the contention of the assessee that Taj Flight Kitchen cannot be considered as a hotel as it is a separate industrial undertaking which is engaged in the production of food packages on a large organized and mechanized basis for the use of various international airlines. After considering the contention, he arrived at the conclusion that the Flight Kitchen of the appellant was engaged in the manufacture or production of articles within the meaning of Section 80-J(4)(iii) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") and it was not part of the hotel activity of the assessee. Hence, it would not come within the purview of Section 80-J(6) which provides for approval by the Central Government. He, therefore, directed the ITO to allow deductions under Section 80-J in respect of the capital employed in the Flight Kitchen.
(3.) It is contention of Dr. Gouri Shanker, learned senior counsel for the assessee that the activity pertaining to the Flight Kitchen is not a hotel activity. The Flight Kitchen is a separate industrial undertaking which is engaged in manufacture or production of food packages on a large organised and mechanized basis for the use of various international airlines and, therefore, is entitled to get the benefit of Section 80-J of the Act. As against this, learned Solicitor General Mr. Salve, on behalf of the revenue submitted that the activity of Flight Kitchen carried on by the assessee is part of the hotel business and for getting the benefit of Section 80-J (1), it is required to obtain approval as provided under Section 80-J (6)(d) of the Act. Civil Appeal No. 1774 of 1992;