M.KATJU, J. - (1.) THIS is a reference application under S. 256(1) of the IT Act in which two following questions have been referred to use for our opinion : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the CIT did not lawfully assumed jurisdiction under S. 263(1) of the IT Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in holding that the assessee was an Industrial Undertaking and was, therefore, entitled to investment allowance under S. 32A of the Act ?"
(2.) THE assessee is a firm engaged in the construction of tunnels, bridges, roads, etc. The relevant assessment years are 1978-79 and 1979-80. The controversy in this case is whether assessee is entitled to the benefit of investment allowance under S. 32A of the IT Act, 1961. The facts of the case as covered by the decision of the Supreme Court in CIT vs. N.C. Budharaja & Co. & Anr. (1993) 114 CTR (SC) 420 : (1993) 204 ITR 412 (SC) in which it was held that the construction of a dam does not amount to manufacture or production of an article. Since the assessee is not producing any product, hence in view of the aforesaid decision it is not entitled to the benefit claimed by it. The question No. 2 for the asst. yr. 1978-79 and the question referred for asst. yr. 1979-80 are, therefore, answered in the negative i.e., against the assessee and in favour of the Department.
(3.) THE question No. 1 is consequential and hence need not be answered. The reference is disposed of accordingly.;