V. N. Khare, J. - (1.) Leave granted in the special leave petitions.
(2.) In this group of civil appeals and special leave petitions the main question that arises for consideration is whether the business of hatchery run by the assessee comes within the meaning of the expression "manufacture or produce articles or things" occurring in Section 32A(2) and Section 88J of the Income-tax Act (hereinafter referred to as 'the Act). The further question to be decided is whether the assessee is an industrial undertaking.' The appeals excepting Civil Appeal No. 2596 of 1997 are directed against the judgments of Andhra Pradesh and Karnataka High Court whereby the two High Courts following the decision in the case of, Commr. of Income-tax v. Sri Venkateswara Hatcheries (P) Ltd., (1988) 174 ITR 231 (Andh Pra), rejected the applications of the Revenue filed under Section 256(2) of the Act holding that the business of hatchery comes within the meaning of the expression "an industrial undertaking producing articles or things" and in one case answered the questions in favour of assessee. Whereas in Civil Appeal No. 2596/97, the Bombay High Court has rejected the application of the assessee under Section 256(2) of the Act following the decision in the case of Commr. of Income-tax v. Deejay Hatcheries, (1995) 211 ITR 652 (Bombay), wherein it was held that the business of hatchery cannot be termed as an industrial undertaking producing articles or things. That is how both sets of appeals are before us.
(3.) Respondents in these civil appeals and the appellant in civil appeal No. 2596/97 (hereinafter referred to as the assessee) have poultry farms and they run hatcheries where eggs are hatched on large scale by adopting latest scientific and technological methods. The aforesaid questions arose when the assessee in connection with their Income-tax assessments for the relevant years claimed that since they are industrial undertakings engaged in the business of producing articles or things, they are entitled to development allowance under Section 43A and deductions under Sections 80HH, 80HHA, 80I and 80J of the Act.;