Sabyasachi Mukharji, J. - (1.) In this reference under Section 256(1) of the I.T. Act, 1961, at the instance of both the Revenue as well as of the assessee several questions have been referred to us. At the instance of the Revenue, the following questions have been referred to us: "1. Whether, on the facts found by the Tribunal or on record and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled to relief Under Section 84/80J of the Income-tax Act, 1961, in respect of the new production units added to the existing production units of the assessee at Alupuram, Belur, Hirakud and Muri for the assessment years 1966-67 to 1969-70. 2. Whether, on the facts and in the circumstances of the case, and on a proper interpretation of the agreement between the non-resident company and the Indian Aluminium Company Ltd., the Tribunal was correct in holding that there was no receipt of fees by the non-resident company in India for the assessment years 1967-68 to 1969-70. 3. Whether, on the facts and in the circumstances of the case and on a proper interpretation of the agreement between the non-resident company and Indian Aluminium Company Ltd., the Tribunal was correct in holding that no part of the services was rendered by the non-resident company in India and in that view holding that no income accrued or arose to the non-resident company in India for the assessment years 1967-68 to 1969-70. 4. Whether, on the facts and in the circumstances of the case and on a correct interpretation of the agreement between the non-resident company and Indian Aluminium Company Ltd., the Tribunal was correct in holding that there was no business connection in India between the said two companies within the meaning of Section 9(1) of the Income-tax Act, 1961, and in that view holding that no income could be deemed to accrue or arise to the non-resident company in India for the assessment years 1967-68 to 1969-70. 5. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled to depreciation on roads, fences and culverts within the factory compound at the rate applicable to first class factory building for the assessment years 1966-67 to 1969-70."
(2.) While, at the instance of the assessee, four other following questions have been referred to us : "6. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that in respect of the powder and paste plant at Kalwa, the applicant-company was not entitled to deduction under Section 80E/80-I of the Income-tax Act, 1961, for the assessment years 1966-67 to 1969-70. 7. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that development rebate at 35% is not allowable on the machinery installed at the applicant's company's powder and paste plant at Kalwa for the assessment years 1966-67 to 1969-70. 8. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in not holding that the company is entitled to depreciation on the storage tanks at 10% being the rate applicable to aluminium industries plant instead of at 7% for the assessment years 1966-67 to 1969-70. 9. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that Rs. 55,546 is assessable as income for the assessment year 1968-69."
(3.) So far as question No. 1 is concerned, the Tribunal in the statement of the case has observed, inter alia, as follows: "3. One of the points at issue which arose for the consideration of the Tribunal in the departmental appeal relates to the relief given by the Appellate Assistant Commissioner under Section 84/80J of the I.T. Act, 1961, in respect of the additions made to the assessee's production units at Hirakud, Alupuram, Belur and Muri. The facts of the case, as both the parties pointed out, have already been set out in the orders of the lower authorities and are substantially similar to the case (CIT v. Indian Aluminium Co. Ltd.) which went to the Calcutta High Court. The departmental representative relied on the findings of the ITO, whereas the assessee pointed out that the facts of the case were stronger than those for the year in which the matter was taken up to the Calcutta High Court. In this connection, the assessee pointed out to certain facts relating to this claim which we shall set out below as contained in a separate statement filed by the assessee : JUDGEMENT_114_ITR140_1983Html1.htm Hirakud Smelter (Hirakud II) : Completed in 1961--Previous plant capacity 10,000 tons per annum--new capacity additional 10,000 tons per annum. Unit housed in separate buildings ; cost for this new project was approximately Rs. 22 million. This new project for the first time had facilitated to produce wirebars with special grade metal for supplying to cable manufacturers under separate commitments to Government of India. New Industrial Licence No. L/IB(1)/N-4/59 dated 10th November, 1959, received from the Government of India. Also confirmed that the new unit was formed not by splitting up or by reconstruction of the existing unit. Also submitted that the buildings or machinery used for the new unit were absolutely new and not used previously. Also confirmed that the new project was financed by additional capital. Alupuram Extrusion (Alupuram) : Completed in 1961--Previous plant capacity 1,500 tons per annum. New plant capacity 3,700 tons per annum. Further land acquired and a new building constructed to house the new Extrusion Press. The project cost came to about Rs. 7.3 million and is capable of producing large and heavy extruded sections, which the old unit could not do. New Industrial Licence No. L/IB(2)/N-44/59 dated November 10, 1959, was obtained from the Government of India for producing another 2,500 tonnes per annum of Extrusions. Confirmed that the new unit was not formed by splitting up or by reconstruction of the existing unit. Also submitted that the building or machinery used for the new unit were absolutely new and not used previously. Also confirmed that the new project was financed by additional capital. Muri Alumina Plant (Muri No. II) : Completed in 1961--capacity of previous plant 18,000 tons per annum ; capacity of "new plant 36,000 tons per annum. Consequent upon the newly added smelter units at Hirakud a new section at the Alupuram Plant had to be added to meet the increased alumina requirements of the new smelter. Under this new project, new digestors, autoclaves, turbo alternators and boilers, etc., were further installed. This new section was to operate on double digestion process as against the single digestion process under the existing facilities. The entire project cost was about Rs. 28 million. Confirmation that the new unit was not formed by splitting up or by reconstruction of the existing unit was filed. The buildings or machinery for the unit were all new. The new unit was financed by additional capital. BEWR-II Industrial Licence No. L/IB(C)/H-44/50, dated 10th November, 1950, was received from the Gov't. of India for the production of another 1,500 tonnes per annum of fabricated products at Belur. For giving effect to this increased production a new 4 feet high mill was installed at a separate building. The cost of these facilities amounted to approximately Rs. 38 million. Initial capacity was for 9,000 tonnes per annum. Also confirmed that the new unit was not formed by splitting up or by reconstruction of the existing unit. Also submitted that the buildings or machinery used for the new unit were absolutely new and not used previously. Also confirmed financed by additional capital. 4. From the above facts and in view of the Calcutta High Court decision in this very case (CIT v. Indian Aluminium Co. Ltd. the Tribunal upheld the Appellate Assistant Commissioner's action in granting relief under Section 84/80J.";