Ajit K.Sengupta, J. - (1.) In this reference made at the instance of the Revenue, the following common question of law has been referred by the Tribunal under Section 256(1) of the Income-tax Act, 1961, to this court for its opinion for the assessment years 1975-76 and 1978-79 to 1980-81: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the activity of the construction of multi-storeyed buildings consisting of flats is nothing but manufacture and production of flats which are articles within the meaning of Clause (iii) of Sub-section (4) of Section 80J of the Income-tax Act, 1961, and in that view in further holding that the assessee is entitled to relief Under Section 80J for the assessment years 1975-76 and 1978-79 to 1980-81 ?"
(2.) Shortly stated, the facts are that the assessee is a partnership firm. At all material times during the relevant previous years corresponding to the assessment years under reference, the assessee-firm was engaged in the business of constructing multi-storeyed buildings for sale of apartments contained therein. The assessee-firm claimed deduction in respect of profits and gains derived from its aforesaid activity under Section 80J of the Income-tax Act, 1961. The assessee's claim for deduction under Section 80J was negatived by the Assessing Officer on the ground that the construction of multi-storeyed buildings could not amount to manufacture or production of any "article".
(3.) But the Commissioner of Income-tax (Appeals) for the assessment years 1978-79 to 1980-81 and the Appellate Assistant Commissioner of Income-tax for the assessment year 1975-76 allowed the said deduction treating the assessee as an industrial undertaking manufacturing or producing an "article" being the multi-storeyed building to qualify for the deduction.;