SUHAS CHANDRA SEN, J. - (1.) THE Tribunal has referred following questions of law before this Court under s. 256(1) of the IT Act. 1961: "1. Whether in the facts and circumstances of the case and in view of the fact that the meaning of Industrial company for the purpose of concessional tax as per the Finance Act, 1980 and Industrial Undertaking for the purpose of benefits under s. 80HH and other benefits are quite different and disputed, the Tribunal is justified in holding that action under s. 154 can be taken by the CIT(A) ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that as the assessee is an industrial company for the purpose of concessional tax. the other benefit, viz., benefit of s. 80HH is also available ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that is assessee is an industrial undertaking within the meaning of s. 80HH and is entitled to the benefit entered in that section ? 4. Whether the meaning of an industrial company for the purpose of concessional tax and industrial undertaking for the purpose of other benefits in the Act are one and the same ?"
(2.) THE assessment year involved is 1980-81 for which the relevant accounting period is the financial year 1979-80. The facts as stated in the Statement of Case are as under: "The ITO in his order of assessment under s. 143(3) dt. 28th Feb. 1981, amongst other things noted that the assessee is a private limited company and its business is in the purchase of liquor from another company i.e. Prakash Distillery Co. Ltd. He noted that the business of company was to bottle the produce purchased, corking and packaging of the same and to distribute to the licensed dealers. The ITO mentioned that the company itself did not manufacture of produce article and hence, the company was treated as non-industrial company. On an earlier occasion, the assessee filed an appeal before the CIT(A), who disposed of the same by his order dt. 8th Sept.,1981. The assessee moved a petition under s. 154, dt. 11th Feb., 1982 before the CIT(A) for rectification of certain mistakes apparent on record. It was stated that the ITO is wrong in treating the company as a non-industrial company and charging tax as such and disallowing all claims admissible for industrial company. It was pointed out to the CIT(A) that while disposing of this ground, the predecessor CIT(A) treated and accepted the assessee as an industrial company but failed to mention that the company was entitled to other claims admissible for industrial company. It was also pointed out that while giving effect to the order of the CIT(A), the ITO allowed the benefit of rate of tax for industrial company but did not allow deduction under s. 80HH. Rectification was sought for.
(3.) THE CIT(A) considered the various aspects of the matter and the submissions made before him, and agreed with the submissions made on. behalf of the assessee. He noted that for the purpose of s. 80HH, an industrial company is one which is engaged in manufacturing process, while making a reference to the decision of the Hon'ble Punjab High Court in the case of East India Cotton mfg. (P) Ltd. 20 STC 489 (Punj) and held that the country liquor produced by the assessee company after processing rectified spirit does not entitle it to being classified as an industrial company and accordingly the ITO's finding in this regard was negatived.;